The American economy is perhaps in the best condition it has been in the past fifty years. The same cannot be said of retailing, which has been struggling for three years. The struggle revolves around a changing competitive environment as well as consumer demographics and attitudes. For relief from this competition, retailers are beginning to create a strategy for gaining entrance to foreign markets. On a positive note, they see their organizations as leading the world in the use of technology and believe many of their merchandise formats are superior. Most of all, retailers in the United States see a crumbling of traditional protectionism in the world and an acceptance of more free enterprise. The people charged with leading the American firms into the global marketplace, the research directors, face the biggest challenge of all. Once outside of their own country, they are forced to deal with a learning curve that needs a lot of work. Some smart entrepreneurial market research firm will no doubt find some new customers.
The continued growth of the superstore and super chains has created chaos in the U.S. retailing markets. It has particularly taken its toll on the more traditional retail chains and at the same time created severe problems for manufacturers attempting to position themselves for the next several years. For example, a paper products manufacturer, who in the past has dealt primarily with major supermarket chains, has found two new channels of distribution upsetting his five-year plan. The first is the continued growth of the Warehouse Clubs (Sam's and Price/Costco) which sell millions of bulk packed facial and bathroom tissues, as well as paper towelling. These relatively new outlets are in direct competition with the firm's regular- supermarket customers and bring on a need for price cutting.