The good news is consumer spending is poised to rebound in 2010, according to Dr. Robert Genetski, but their are "wrinkles" in the economic outlook which could cloud the picture. Genetski, who delivered the 2010 economic outlook at tekSESSIONS 2009, pointed out that the role of government policy and government spending.
While Genetski predicted a sharp increase in total spending next year, in the range of 6% to 8%, he cautioned that spending could be slowed to 5% or less if credit is tightened by banks who may be forced to pay FDIC insurance in advance to crunch caused by the high number of bank failures this year.
Genetski predicted some credit relief in 2010, but again cautioned that any pullback in lending could have a negative impact on spending as well as retailer's ability to borrow. He recommended retailers prepare for sales recovery, but maintain an ongoing focus on cost containment due to the reality of higher taxes, rising energy costs and tight credit. Genetski also recommended retailers monitor the Fed's behavior and also can an eye out for potential inflation. Given the unpredictable climate and the potential for inflation, Genetski recommended retailers avoid fixed price contracts.