Inflation and Consumer Confidence Essay

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Dillard’s Inc.
Dillard’s is a retail department store that sales fashion apparel for men, women and children, they sale home goods, cosmetics and accessories of premium and private label brands. Dillard’s target of consumers are middle class and upper class people. This company operates retail stores and websites under brands like Guess, Polo Ralph Lauren, DKNY, and many more . Dillard’s primary customers are mostly women. In 2008, women apparel and accessories were 40 percent of total sales of Dillard’s. Men’s Apparel is 20% of total sales and cosmetics are 15 percent of sales. These three are the top sales of Dillard’s products.
Dillard’s has been around in the United States for over 40 years now. The founder of Dillard was William Dillard’s. Dillard’s had started out as a very small store in Nashville, Arkansas. His strategy was to offer national brand name merchandise to consumers. He started to receive profit from his business and had started to expand it. Then finally after so much study of business and the money saved up from his small business he had his biggest success in opening the first Dillard’s retail store in Austin, Texas which was in a shopping mall. Dillard’s believed that a great location for a business will always lead to a successful business, that is why his key location for Dillard’s was to be in a mall where many consumers enjoy to shop. In 1969 Dillard’s started to offer stocks to investors. Dillard’s was so successful that in 2001 a retail company “Montgomery Ward” had went out of business. Now, there are 315 stores open across the United States.
Dillard’s is struggling a lot in today’s economy. Dillard’s will close many of its stores in 2009. From years 1999-2005 its annual profit would be above 5%. Now, the annual profit of the company is in the negatives. The year 2009 has been the worse for Dillard’s. Annual profit Margins of Dillard’s have fallen more than 3.5%. Annual Gross sales are also very bad for Dillard’s compared to other department stores. Dillard’s sales have fallen very low in the year 2009 compared to year 2008. Year 2008’s sales were -4 % but now sales have been in the -6% for Dillard’s.
Dillard’s Stock prices have also fallen very low. The prices are not in the negatives but still has fallen very low compared to the last couple of years. In the year 2007 stock prices were high from up to $18.78 and now the stock prices in 2008 are up by only $3.97. The people that have Dillard’s stocks are currently not suffering but are more likely to suffer in the near future because of Consumer Confidence and Unemployment. Dillard’s stocks are good for the short-term investment but it is not a good idea to invest in Dillard’s for the long-run.
The Consumer Confidence Index is a indicator that measures Consumer confidence. Consumer Confidence is when people spending and saving activities depend on their incomes. If the consumer Confidence is high than that means that consumers are spending more and this will be good for the Gross Domestic Product and the economy. If the Consumer confidence is low than the consumers are saving more and consuming less . If the consumer’s don’t spend and save more than this will hurt the Gross Domestic Product(GDP). We get information about the Consumer Confidence by the Conference Board. The conference Board is highly supported by the Federal Reserve and investors. The Consumer Confidence Index has increased slightly in November, compared to the month of October. In this graph here the consumer confidence in the graph shows that the current consumer confidence is low so people are not consuming much and saving more. As shown Consumer Confidence was high in November of 2007 but have been falling since May of 2008. This is not a good sign. People do not feel confident enough to spend their money because of the down economy.
The consumer confidence is calculated by phone interviews of about 1000 adults
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