Holiday Forecast for 2010
2010 A Time To Reset
The shock of the recession has permanently altered consumer, investment and governmental behavior. As a result, the growing economy of 2010 and beyond offers opportunities, but no free rides. Gaining private profits and public welfare from future economic growth will require the ability to discern and respond to these permanent behavioral changes.
We can all look forward to economic recovery by the third quarter in 2010, but to navigate it successfully will require adopting to the new, rather than a return to past economic upturns.
- Consumers will switch from ostentatious consumption to diffidence, and at least a display of thrift
- Increasing emphasis on housing quality without price increases will characterize the recovery in housing construction and the accompanying uptick in home furnishing prices
- Energy efficiency and style will compete well with muscle autos as the new "chic cars"
- Sales at Amazon.com, the new Wal-Mart of the internet, will beat the growth of same store sales at big box retailers
- Successful outlets will offer experiences as well as retail goods. Take a tip from Disney, which plans to create theme parks in their existing and new stores
- Professional services will see growth of globally integrated virtual partnerships, creating demand for smaller offices
- Well-priced everything - including hotels - is the name of the game. A symptom of this is the airlines' decision to reduce seats in the first class and business class on overseas flights, while adding "economy-plus" seating to serve their value-seeking business travelers
- Public service providers and regulators, as well as businesses, must reset their practices in tune with the behavioral changes that will remain long after the recession in output is gone
Gruen Gruen + Associates wishes you and your family a healthy, happy, peaceful and prosperous New Year.