November/December 2024 - 36

POHMER ON ...
A GOAL WITHOUT
A PLAN IS
Just a Wish
The key to success in 2025 will be in your attitude and approach
to finding and implementing solutions for your customers.
+/-3% month to month over already highly inflated
prices. Absolute prices aren't decreasing, they just aren't
growing as quickly as before.
By Stan Pohmer
B
ased on my experience of working with retailers in
many different fields and of a multitude of sizes,
I'm constantly amazed that, when planning for
the upcoming season or year, too many simply look at
last year's performance, choose a specific sales increase
or decrease, and make their buying plans based on this
number. They often base this decision on a gut feeling
based on their many years of experience in the business -
and fail to factor into their decision process all the various
challenges and obstacles that the consumer has to deal
with that will drive their spending behaviors. Consumer
behavior has a lot more impact on the retailer's sales and
profit than their gut instinct.
Consumer Behavior to Watch
Following are just a few of the externalities that
consumers will face in 2025 that will help form their
behaviors and responses.
* Continued political polarization, especially in a postelection
year. As I write this article in late September, the
head-to-head poll numbers between Trump and Harris
are extremely close. Which party will control the House
and Senate? What financial, social, immigration, etc.,
policies will evolve over the next year? Trepidation and
uncertainty reign.
* Though the rate of inflation is under 3% right now, we
must remember that means prices are " only " increasing
36 | LAWN & GARDEN RETAILER | NOVEMBER/DECEMBER 2024
* The Federal Reserve has reduced the interest rate (and
likely will lower it more over the next year), which is
beneficial to those applying for new mortgages (or
refinancing existing mortgages) and taking on new credit
card debt, but has no impact on the interest on existing
consumer debt (which is at all-time high levels).
* There's been relatively limited federal cancellation of
college debt (and the potential for additional mass
cancellation is low), and the moratoriums that have
been in place from the pandemic period are being
eliminated, meaning that disposable income will be
diverted to debt payments; failure to pay these monies
owed will result in hits to credit ratings leading to
difficulty in obtaining mortgages and loans.
* Wage increases are not keeping pace with inflation,
leading to loss of consumer spending power.
* Auto and homeowners' insurance costs are increasing
20-50% per year (if one can even obtain policies,
especially in areas hit by catastrophic damage
(hurricanes, flooding and wildfires, for example) and
higher labor and materials costs to rebuild, again a hit to
discretionary spending.
* Businesses, including those in the technology and
manufacturing fields, are seeing slower sales and are
not filling open positions and experiencing layoffs. Price
value retailers (dollar stores and Walmart included)
are seeing slowdowns in sales, citing lower traffic and
transaction values, with a trend to a focus on essentials
and opening price points.
* Pandemic money that funded new positions and
programs over the past few years are depleted. Once
these hires and new programs are in place, state
a Wsh
November/December 2024

Table of Contents for the Digital Edition of November/December 2024
