Retail Sales Are Up. The Recession is Over. Things Are Great.

Manhattan Restaurant Stops Accepting Cash

Are Business Owners Happier Than Doctors?

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Retail Sales Are Up. The Recession is Over. Things Are Great.

If you have been reading our newsletter regularly, you know that I am somewhat of a pessimist related to the one year retail sales outlook.

Ben Bernanke, our Federal Reserve Chairman, and many economists believe that the recession is probably over. My top advisory board consisting of three restaurant owners and two retail store owners say that their sales are down over the past three months.

My view is that retail sales have more or less bottomed out (depending on how one defines more or less). I believe that if you own a retail store or restaurant, the worst is over. I think retail sales will improve slightly over last year’s miserable figures, but not dramatically.

If you have made it so far, it is likely that you are out of the woods and will see some slightly better days in the near term.

The good news is that retail sales were up in August (compared to the previous August). The bad new is most of the upward retail sales were caused by the cash for clunkers auto discounts and higher gasoline pump prices. If you eliminate these two factors, retail sales were up slightly compared to the previous August (which is far better than being down). Many retailer intend to offer higher holiday season discounts than the previous year. Retail stores in general will reduce their holiday inventories by 11%.

Restaurant sales are slightly up compared to previous years. However, according to the latest  Calculated Risk Survey, the index is at 98.1 at the end of July. That’s up 0.3 from the previous month. Any number below 100.0 is considered to be bad or a contraction of the industry. In other words, restaurant business is still contracting but at a smaller rate.

The restaurant Calculated Risk number is considered very important to general retailers. When people start spending more money in restaurants, they normally spend more money in retail stores.

This is the 23rd straight month of restaurant sale contraction (declining traffic).  The good news is that based on the projections and restaurant owners optimism, we are getting very close to the end of declines.

To read the entire article, go to:

http://www.dollarsandsense.org/blog/2009/08/one-forgotten-indicator-restaurant.html

Manhattan Restaurant Stops Accepting Cash

In a previous newsletter, I talked about several restaurants that were offering up to 20% discounts to customers paying by cash. Now, we have a Manhattan restaurant in Greenwich Village that stopped accepting cash.

If you’re not using a credit card, take your business elsewhere. According to the restaurant, 90% of their customers already pay by credit card. People use their credit cards to pay for a taxi ride and contribute to the Salvation Army. According to Commerce Restaurant, if you don’t have a credit or debit card,  you probably don’t have a checking account and probably shouldn’t be eating at the Commerce Restaurant. Tony Zazula, the owner is a veteran restaurateur with an M.B.A. from Cornell University.

According to the owner, credit cards only, mean no more armored trucks to deposit cash in the bank and possibly less scrutiny by the I.R.S.

It’s a pretty interesting concept and the restaurant has surely received lots of publicity including an article in the Wall Street Journal. See it at:

http://online.wsj.com/article/SB125260838282300453.html?mod=dist_smartbrief

Are Business Owners Happier Than Doctors?

According to the Gallup-Healthways Well-Being Index, business owners are actually happier than doctors. The least happy people are those in the transportation industry.

The key to occupational happiness or wellness is the importance of choosing the work you do and how you do it. Increasingly doctors and lawyers who make lots of money are feeling trapped.

Business owners are the entrepreneurs that run their own businesses. Despite the recession, business owners enjoy the work because they feel that they are in control of their own destinies. Even though half of all businesses fail within five years, and working hours exceed 48 hours a week, business owners enjoy what they are doing. “You do your own thinking and no one can tell you you’re wrong.”

You can read the complete article, “Plumbing For Joy? Be Your Own Boss” in the Wall Street Journal at:

http://online.wsj.com/article/

SB10001424052970203917304574414853397450872.html

(You need a paid subscription to The Wall Street Journal online, well worth the price, to read the entire article. Or write to me at hgosman@pcamerica.com and I can email you a copy).