Its All about the price

The off price business has always been about the prices we charge and the products we deliver and in recent times this statement could not be truer. In the last few years the price points have dropped considerably and the difference between a sale or a lost order can simply come down to pennies. The decision to accept or reject an order was based on supply and demand of the item and the profit or loss that would result.

The supply and demand curves if not broken are significantly impacted with the recent changes in the economy. On the supply side our industry continues to see shortages in many product categories. These shortages normally produce an increase in demand and therefore price increases. The problem is that the demand in off price industry is strictly tied to the price and if the prices are dropping and the inventory levels are declining how can the demand be met.

The demand side is driven by the willingness of the consumers to spend additional dollars on products. With the economy faltering and the consumers unwillingness to spend manufacturers are producing fewer goods and therefore the off price industry is seeing fewer irregulars and less closeouts.

The big question becomes will prices rise or will we go without?