For some, a return to "the paycheck cycle"

The current economy has impacted more than just what people buy. In some cases, it has affected how and when they buy it. With credit card companies often trimming the size of credit lines and adjusting terms, “cash is king.” But in an economy like this, the month sometimes lasts longer than the money… so many businesses are seeing a return to the days when consumer spending spikes immediately following a payday.

Read more about the phenomenon in this story from the Wall Street Journal.

Implications: What consequences might our increasingly cash economy have on your business?

If you’re in retail, the paycheck cycle could affect staffing, stocks and more. (Does it make sense to “heavy up” near the first of the month, and run more efficiently toward the end?) Is the same true for people who run restaurants?

If you’re a manufacturer, or involved with merchandising, does it make sense to showcase larger packaging (stock-up sizes) at the beginning of the month, and then dedicate more shelf space to smaller sized packages toward the middle and end of the month (for people who want just enough to “get by until payday”)?

Have you noticed any cyclical mood swings in your customers; seemingly lethargic or “thrifty” in the second half of the month… but smiling and upbeat after payday? If you’re a local company, it might be a good idea to check around with the major employers in your trade area… to see which payroll monthly, which write checks bi-monthly, and which companies call “payday” every week or two weeks.

Mike Anderson