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Retailers Reach Out to Foreign Shoppers
by
findingDulcinea Staff
As retailers try to offset sagging domestic sales, smaller stores take advantage of the weak dollar to sell their products online to customers abroad.
30-Second Summary
January retail sales sank to an all-time low as recession-wary consumers cutback their spending. Sales at major stores rose by a mere 0.5 percent over last year, the worst January showing since record-keeping began in 1969.
Following the disappointing results, some chains have announced they will cut jobs and close stores.
Others hope to tap the spending potential of foreign shoppers, many of whom make frequent trips to the United States to take advantage of the weak dollar.
Small U.S. retailers are exploiting the dollar's weakness by using the Internet to sell to customers abroad.
Online sales are a less expensive way to establish a presence abroad than building stores outside the country. But there are distinct challenges associated with this type of expansion, The Wall Street Journal writes. Taxes, customs duties and shipping costs are just some of them.
Following the disappointing results, some chains have announced they will cut jobs and close stores.
Others hope to tap the spending potential of foreign shoppers, many of whom make frequent trips to the United States to take advantage of the weak dollar.
Small U.S. retailers are exploiting the dollar's weakness by using the Internet to sell to customers abroad.
Online sales are a less expensive way to establish a presence abroad than building stores outside the country. But there are distinct challenges associated with this type of expansion, The Wall Street Journal writes. Taxes, customs duties and shipping costs are just some of them.
Headline Links: ‘Going Online to Lure Foreign Shoppers’
“Using the Internet to build a presence abroad is far less costly—and can be accomplished much more quickly—than building stores. And international markets are especially attractive now since shoppers in many of those markets haven't cut back on spending,” The Wall Street Journal writes. Some analysts, however, warn of the drawbacks of such global expansion.
Source: The Wall Street Journal
Background: Retail industry reports dismal sales
This was the worst January in retail sales since record-keeping began in 1969, according to Advertising Age. U.S. sales grew by a mere 0.5 percent over last year. "With uncertainty about the economy and the possibility of a recession, consumers have pared their spending," says Michael Niemira, chief of the International Council of Shopping Centers.
Source: Advertising Age
Big retailer chains are bracing for a recession by announcing store closures and job cuts. The retail industry posted the worst monthly sales in at least five years, The Wall Street Journal wrote. Weakness in the retail industry will affect commercial builders, commercial-property landlords and manufacturers.
Source: The Wall Street Journal
Analysis: It isn't all gloom for American retailing
Small retailers have profited from the dollar’s weakness by selling online to customers in Canada, Europe and Australia.
Source: ABC News
Although a slowing economy is bad news for American industry, “some U.S. retailers benefit from foreign tourists armed with stronger currencies seeking bargains, particularly if they have flagship stores in New York,” writes Forbes. “But for most retailers, a benefit from the weaker dollar is not a cure-all for bigger problems,” the article adds.
Source: Forbes
Foreign tourists are driving up retail sales in cities like New York, Chicago and Miami, but Wall Street suspects the boost this gives the U.S. economy will not last.
Source: MSNBC
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