Economics for Tertiary Sector Essay
‘Slower labor productivity growth in Europe than in the United States since 1995 reverses a long-term pattern of convergence. This has a negative impact on the turnover as it leads to lower growth contributions from investment in information and communication technology.’ (Bark, O’Mahony and Timmer, 2008)
On the other hand, the retail …show more content…
‘In a recent survey conducted by Harris Interactive, 84% of U.S. adults are currently taking steps to save money as a result of the current economic climate. According to the survey, 70% of adults are reducing their discretionary spending. Only one-in-four U.S. adults are still willing to splurge this holiday season, given the economic times. One key retail sector that relies heavily on holiday sales is the fashion industry, however in the survey 75% of adults said they have purchased uncomfortable footwear because the shoes were simply on sale.’
In competition to retail stores, there is online shopping which is quite successful during these days. Time and effort is reduced when purchasing online. On the other hand, selling goods online is relatively much cheaper than to have a retail store. There is no rent, overheads, wages or fixed cost, which increases the net profit margin. However a customer might not be able to test or wear the specific product, especially when it comes to the clothing industry.
With the current recession period, jobs have been lost and most being in the retail sector because business are not able to afford the overhead expenses as sales have reduced due to fall in peoples income. Statistics show that ‘Retailing is facing the toughest trading conditions in decades, with predictions of 15% of shops closing