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Top2. Tighter Consumer Spending
Retailers flourished for many years before the Great Depression of 2008-2009. After the recession, consumers became cautious regarding their spending habits (Murphy, 2011). So, the economic situation changed and the fortunes of many retailers turned from boom to bust. Even after the recovery of the economy, the spending habits of consumers have not changed much. Critics are of the opinion that retailers will feel the effects of changed consumer spending patterns well into the future (Chavez, 2012).
Retailers also benefit from the economic downturns. For example, when consumers cut back on their costs by becoming thrifty and spending less, those retailers who offer big discounts, benefit. Retailers like Walmart and Costco generate new business from bargain-hungry shoppers (Zimmerman, 2012). Also, price-oriented and off-price retailers such as Dollar General, ALDI, and TJ Maxx have attracted greater shares of more frugal buyers (Edelson, 2011).