How does the current US economy affect REI retail operations

How does the current U.S. economy affect REI retail operations?

Solution

The U.S. has been able to alleviate downturn the impact of downturns in the domestic and retail consumer spending. Given the current economic climate and the challenges facing U.S. customer, it seems that foreign economic growth will not be enough to prevent further recession in the United States. A prolonged recession in the consumer and service sectors can have a significant effect on relation between the economy and its effect on retail sector.

Consumer spending is considerably low, which induces people to borrow all possible loans that is detrimental to the growth of the U.S. economy. Discretionary income is limited, dollar value is shrinking and people have to forego leisure activities until monetary outlooks improves. Sports are somewhat of a luxury and the local and U.S. economy directly affects sales.

Fluctuations in the currency exchange rate impacts costs of outsourcing goods. REIs costs fluctuate, at times their costs may increase, and at other times may decrease. People just no longer have money for recreational activities as they have to follow strict tight budgets. This results in a loss of revenue for REI. REI have to make changes accordingly until the situation improves.

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