Retail Economics

Positive financial outlook for retail industry in 1996 & example (expansion of Starbucks Coffee).

Assessment of Economic Conditions, and Implications For the Retail Industry
The moderation in economic growth and improvement in inflation prospects in the second-half of 1995 over the first-half of the year caused the Federal Reserve to project a continued lowering of longer-term interest rates (Monetary, 1996, p. 758). Lower interest rates, solid earnings growth, and prospects for sustained economic expansion are expected to create a positive outlook for the retail sector.

Despite the slower expansion of nominal spending in 1995, net borrowing by households and businesses remained substantial (Monetary, 1996, p. 760). In fact, total private credit flows strengthened, offsetting slower growth of federal debt and an outright decline in state and local government debt. As a consequence…