How Vulnerable Is Your Business to Consumer Debt?  

Oleh:

Jarvis, William ; MacMillan, Ian C.

Jenis: Article from Bulletin/Magazine - ilmiah internasional
Dalam koleksi: Harvard Business Review bisa di lihat di link (http://web.b.ebscohost.com/ehost/command/detail?sid=f227f0b4-7315-44a4-a7f7-a7cd8cbad80b%40sessionmgr114&vid=12&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&jid=HBR) vol. 87 no. 10 (Oct. 2009), page 82.
Topik: Risk; Recovery; Stock Market; Consumer Goods; Consumer's Debt

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Perpustakaan Pusat (Semanggi) Nomor Panggil: HH10.39 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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This past summer a certain amount of optimism began to reemerge, with talk of “green shoots” and even a potential recovery as the stock market rebounded by 30% from its low in March. That optimism may be misplaced, however. Look at the graph below, which tracks the ratio of U.S. consumers’ debt to their disposable income. While a little off its high point, the number now stands at around 130%. In other words, it will take American consumers nearly 16 months ( 1.3 years), on average, to pay off their debt, assuming that they spend absolutely nothing on housing, clothes, or food. American consumers have maxed out their credit, and with household wealth down as a result of the property collapse and employment prospects uncertain, they’re not about to take on more. Instead, they’ll be looking to cut back on it. Many will default. Both the defaults and the waning consumer appetite for credit bode ill for businesses. Companies that sell big-ticket consumer goods are the most obviously at risk, because credit-shy consumers can simply opt to put off buying cars, cookers, and other durable goods for another year. Very often these companies help consumers finance purchases, so defaults hit them directly. But you don’t have to be in the consumer credit business to suffer. Any company that sees a large proportion of its sales come through credit cards will experience significant drops in revenue, because people usually cut back on credit card purchases before they do on cash ones. What’s more, an increase in defaults will most likely translate into higher processing fees from the credit card companies. Even if your customers are all other businesses, you’re still not safe. What if they in turn sell cars, refrigerators, and furniture?

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