Can Retailers Really Blame the Media?

If you haven’t caught it, there was a great article yesterday in USA Today about the negative impact unfavorable media reports can have on the industry. Over here at Counter Culture, we’ve been pretty convinced of otherwise.

Our main feeling has always been: Do consumers really care that much? If anything, we’ve always thought that reports of a chain doing poorly will actually attract shoppers because they’re going to expect bargains.

Well, this article didn’t necessarily convince us otherwise (we’re not going to ignore a retailer’s announced store closings any time soo), but it did bring up a few points that we hadn’t considered.

False rumors about gift cards not getting redeemed. We haven’t reported on anything like this, but it does make sense that this could have some negative impact. Charming Shoppes executives actually attribute this to weakened gift card sales over the holiday season.

False reports about an unhealthy retailer can damage relationships with suppliers. Is this really true? We would hope that it isn’t and that suppliers have a financial relationship with stores that goes beyond just checking up on them in the media. (Plus, how many suppliers are doing all that great nowadays?)

One point we were glad we saw: Journalists rely on speaking to “independent experts” because MANY MAJOR RETAILERS DON’T TALK TO THE MEDIA. The story particularly concentrated on the doom and gloom forecasts of Howard Davidowitz, an analyst who we’ve loved quoting in the past because he has such colorful things to say. We’ve always left it up to the reader to determine whether or not they agree with him.

Also, make sure and look at the sidebar in the article that shows the health of some major retail chains based on S&P data. Interesting.

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6 Responses to “Can Retailers Really Blame the Media?”


  1. 1 bobgreenfest April 14, 2009 at 7:59 am

    The media’s purpose is serving as a doomsayer. As I stated in a recent blog entry, “if the media was around when Edison invented the light bulb they would have lamented the death of the candle”. That said, once the public’s fear of taking action is less than their continued fear of inaction and paralysis, retail sales will begin to improve. For additional information, see http://www.bobgreenfest.wordpress.com.

  2. 2 Bruce Davis April 14, 2009 at 12:21 pm

    Consumers dont pay attention to the media. When they need something and want to buy it, and have the money for it, then they will go out and do so. Do they stop and think; “was it BB and Beyond, or Tuesday Morning who filed bankruptcy?” when out doing their Saturday shopping? Retailers who tease the consuming public with loss leading merchandise, yet knock them in the creek with other items that are priced at 10x cost cannot blame the media. It is their own debt based business plan which has them in the red all year, only to make money during Christmas that is to blame.

  3. 3 John G April 14, 2009 at 5:23 pm

    The media is certainly a big part of the problem and could be a part of the solution. People DO listen to the reports about stores going out of business or sales being down and they do tighten their pursestrings when that occurs. We are a media driven society and most people are too shallow to get to the facts or certainly read through the entire story to the last paragraphs where the truth might get told.
    If it bleeds it leads works for bad news just like crime. Good news doesn’t sell nearly as well. Let’s remember that to sell a war, a president, a stimulus package, a product or anything else the media is involved and very influential.
    We do have a crisis but it was made much worse by the media. It will not improve until the media begins reporting that things are improving (note improvements since the stimulus package was passed??). Once this crisis is over there will be a new one, hopefully just not directed at retail……
    Lastly, a major newspaper contacted two of my associates in different parts of the country wanting to do a negative story on landlord/tenant relations. When my associates offered positive responses about cooperation the writer declined saying. “that is not the story my editor wants to write”.

  4. 4 James April 15, 2009 at 8:32 am

    When we build a center and the tenants are successful its because they are such genius businessmen. When we build a center and the tenants struggle its because we built such a crappy shopping center or because our rent is too high! Its human nature to look somewhere else to place the blame. If retailers are concerned about negative media reports they should counter that with positive information through their advertising. At the moment nothing can stem the current downturn, it is the result of a fundamental shift in consumer thinking—greed has turned to unbridled fear. The consumer is frightened by the realization that what they believed to be true, what they were told was true, no longer is, that the platitudes and assumptions they lived by have been turned upside down. They realize that they placed their trust in greedy fools at the highest levels. None are more shook up than the same fixated thinkers who believed strongly in simplistic solutions, those same who are now unwittingly promoting fear and uncertainty and actually perpetuating the malaise. The turn around will occur when consumers have learned to understand and trust the new paradigm.

  5. 5 Joshua April 15, 2009 at 4:47 pm

    @ Bob – they latch on to whatever the word of the day is, whether it be banks failing or home prices rebounding!(?) The media over simplifies and generalizes everything. it is a disservice to educating the population, even in the slightest way.

    @ Bruce – that’s inaccurate. while a shopper may not be concerned if that store will still be open the day after they buy new dish towels, the media reports create a negative (or positive) psychological effect on the larger group of population.

    now, this blog asks a simple question. and the answer is sometimes. did barney frank cause indymac to fail? no. did he cause an almost immediate media barrage and subsequent run on the bank? yes. now, this didn’t cause indymac to fail, but it exacerbated the problem. and i think that is the more appropriate reality of the media’s culpability. hypothetically, indymac could have worked out a sale (or could have been working on trying to work out a sale), instead the FDIC moves in. frank says he just wanted to draw attention to the problem (and to himself for solving it). but what good did that do anybody? if your deposits are insured, you’re safe, yet i saw a number of people go stand in line and pull out their $2K, $10K deposits. so stupid. its the psychological effect. then the coverage of the lines, with grandma pulling out $1500, and the terror, and who’s next? and what do you do if your bank fails? it becomes a circle jerk that is benefiting no one but advertisers.

    i wish i could show the OC Registers business section for the last 3 years. “home prices set new record”, “new home sales drop”, “home sales rebound”, “home prices dip”, “is this a bubble”, “will you be able to afford a home”… everyday, a new sentiment on the market. literally, 7 views in 7 days. this is not good media coverage.

    to move on to the more pressing issue, we should be demanding responsible reporting from our media. by responsible, i mean taking an educated look at issues, presenting the sides to the story and educating people on what is happening. i don’t need to watch a segment on “what to do if my bank fails” because i know my deposits are insured. this doesn’t stop the media from imploring people to stay at home or asking the person in line “so if you only have $5000 in the bank, and its FDIC insured, why are you here? don’t you realize your making the problem worse for the other people with money in this bank?”

    lately, we’ve seen a switch. time magazine trying to breakdown CDO’s. nice little article with nice graphics. however, they cant do the topic justice, its too large to fit in a 3 page spread. do i want to see KNBC teach me about CDO’s? no. but do i want the person who wrote the script on the prompter to be able to string together factually correct statements and bring some amount of intelligence about the overall problem to the newscast? yes.

  6. 6 Darrell April 23, 2009 at 6:04 pm

    The faster the media reports it, the faster we can get over it and move on to the next issue. “And that’s the way it is.” (Thank you Walter.)


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