Gourmet Business July 2014

I had the pleasure of listening to a keynote address delivered by Steve Forbes, the publisher of Forbes Magazine, at the recent IDDBA Conference in Denver. He spoke at length about the state of the U.S. economy and how our current administration’s monetary policy (among other things) is primarily to blame for the slowest economic recovery our country has ever experienced. Politics aside, you can’t argue with the facts. Forbes, a respected economic analyst, predicts that the economy will only grow by 2.5 percent this year ... Yikes!

Being the eternal optimist, I tried to shrug off Forbes’ grim proclamation and dismiss it as part of the political rhetoric. Then, this week, the Commerce Department reported that the gross domestic product (GDP) fell at a 2.9 percent rate, the sharpest decline in five years. There are all sorts of good reasons why GDP fell in the first quarter, and many predict the second quarter to be much better, so there still may be reason for hope.

If you ignore the financial indicators for a moment and observe the world around you, there are still signs of progress. I have many friends who had lost their jobs at the beginning of the recession but eventually found gainful employment, and now have disposable income once again. Have you noticed that among the sea of signs advertising real estate for sale lately, there are actually a number of them that now have notices that they are “under contract”? I even have a member of the family who managed to sell their house in a day for more than the asking price ... reminiscent of the good old days, wouldn’t you say?

If homes are changing hands, then traditionally isn’t there significant spending on the home that follows along? Do the recent home buyers
have bigger kitchens and more room to accommodate more great housewares products? Do they have more room and a bigger backyard, which means they can throw a big Fourth of July backyard barbecue? Do they need a grill? Should they buy some specialty foods to enhance the food offerings?

My point is simple. There is money in the economy, but there is much more competition for the disposable income that does exist. We will just have to fight a little harder to attract those dollars to us. Our suppliers will have to get a little smarter, and deliver products that our customers MUST have. Factories and production facilities will have to further innovate and find ways to get product to market at a lower cost. And retailers will have to figure out how to merchandise their products in such a way that they jump off the shelf.

If we all take up this challenge together, we will continue to come out on top.

David Spencer
Publisher, Gourmet Business 

President, HousewaresDirect, Inc.

 dspencer@gourmetbusiness.com