A large number of retail CEOs are leaving their companies.
Retail spending is up we are told, but is it up enough and consistently enough for big retailers to recover and survive?
Some of the retail news seems ambiguous. We have an increase in spending but Black Friday was lackluster (see this report, for example).
Are retailers feeling economic pressure and, as a result, moving on to other jobs?
This Forbes headline mentions Abercrombie, Walgreens, and Target. But the content tells of many more:
For the first nine months of the year, 38 retail CEOs left their jobs, according to the outplacement firm of Challenger, Gray & Christmas. That compares to 29 during the same period in 2013.
In the article, the blame is mainly placed on changing technology that opens up new competition:
“Reminds me of the thought of being President of the U.S.: Are you kidding? Who’d want that job?” said Lee Peterson, EVP of Creative Services at WD Partners. “The money’s one thing, sure, but retailing today is in such an amazing state of flux that it’s almost suicidal to take a CEO gig. No one’s going to stores but you have a million of them, there’s a new competitor every five minutes, there’s a new technology you don’t understand every five minutes … I mean, the list goes on.”
“Look at how the landscape of retail has changed,” said Tony Orlando, owner of Tony O’s Supermarket and Catering. “The malls and strip plazas that once dominated are now being replaced by huge Walmart Supercenters and the wholesale clubs, plus the dollar store craze. Let us not forget the ever-expanding giant called Amazon, along with many, many online companies, and you have a perfect storm for CEO exits.”
I think many are going to read that list and think that the new technology is the main factor. But the new technology should be just as likely to hurt Walmart and the dollar stores. After all, why is there a dollar store craze if not due to financial pressures? Dollar stores have been around for decades. It isn’t as if they were suddenly discovered.
So I suspect that it is not just new technology that is changing the landscape for retailers. People simply don’t have as much money to spend. This would certainly explain why McDonald’s is in decline.
Remember, despite the good news propaganda being pumped out about the “recovery.” Remember, there are still millions of homeowners who owe more than their houses are worth at the current market price. Retailers need people to feel confident about spending money. That can’t happen when people are struggling with debts—whether due to houses, student loans, or for any other reason.
So it seems likely that these CEOs are victims of the Obama “recovery.” I wonder who else will be victims as the situation worsens?
All of us, I suspect.