A growing economy has resulted in easier credit terms for consumers but also raises the possibility of defaults. Bankruptcies are even high despite the good U.S. economy. Nonetheless, new bankruptcy legislation in Washington could make it more difficult for consumers to file for bankruptcy. Retailers are directly impacted since consumers usually finance big ticket items such as washing machines , televisions, and furniture with installment debt. Retailers may be able to recover some debts if consumers file for bankruptcy.
Consumers are more value conscious than they've been in the past.
There shopping habits have shifted from department stores to discounters and mass merchandisers. Many consumers can find the same items at a mass merchandiser that they can find at a department store at a substantially lower price. Christmas time has traditionally been important to retailers but there has been lackluster growth in the past few years despite the booming economy. Part of the problem is shifting demographics. Older people tend to buy fewer clothing as they age.