Retailers' holiday sales plummet

Not that this is a great surprise to anyone but some of the early figures look very gloomy.

NEW YORK (Reuters) - Retailers' sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.

The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.

reuters

Even aggressive price cutting and pre-christmas sales failed to generate additional revenue.

Price-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending, according to new data released Thursday.

Despite a flurry of last-minute shoppers lured by the deep discounts, total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit.

When gasoline sales are excluded, the fall in overall retail sales is more modest: a 2.5% drop in November and a 4% decline in December. A 40% drop in gasoline prices over the year-earlier period contributed to the sharp decline in total sales.

wsj

It seems that consumers are just not willing to spend.
I imagine this means more layoffs are coming adding to the an already strained situation. The lack of sales taxes collected are also going to significantly hurt local and states' revenues.

It is my belief that we are seeing the end of "consumerism" as the driving paradigm of American social structure and culture. Or it could just be a simple cyclical recession/depression. Either way, in the short/middle term, we're in for a whole lot of pain.

Here's a breakdown of the sectors:


wsj

Its not a matter of consumers not willing to spend, it is they simply cannot spend. That money has to go to just surviving now, no room for those extras.

Yes its no surprise..as it should be no surprise to the retailers.

Thanks for posting the early reports for us!



Cheers!!!!

reply to post by RFBurns


You're absolutely right of course, about many many people who presently have no resources for any discretionary spending.

My experience with my own circle of friends is that even those with moderate to high income decided not to spend this holiday season. The massive decline in sales of luxury items seems to confirm that that is the case nationwide.

Did I read that right, or should I re-read it again?

Sales dropped only 4%? What is the big deal, I wonder? I'm truly shocked sales didn't drop MORE than 4%. This tells me people are still spending a lot more than I thought.

reply to post by LostNemesis


As I understand it, a 4% drop year to year in retail sales in an economy the size of the US is significant. Indeed as one of the articles in the OP states, it was the worse christmas sales period in decades.

The Wall Street Journal article also cited in the OP gives a good overview of all the sectors of the economy and how they have been impacted.

If i said the stock market crashed it wouldn't mean anything, but let the bankers lose its the worse financial crisis ever. Truth is ad up the drops during the week you might find that its drop 100's of points. My theory is 5.6 mil people are above 200K, they reflect the same amount of people who depend on their money. Add in 3mil homeless, 143 mil people pay higher taxes, prices etc, for the sake of 12 mil.
My advice can only be to stop paying for anything and resign from that financial world. Work on "the bills" one at a time while you scream for bailout, at least thats the going trend.

We had to go to the mall today to return gifts that didn't fit.
The parking lot was just like any other regular day at the mall.
You'd never know that there were 50-75% off sales everywhere.

Oh ... and the few that were there brought their sick kids.
Sneezing and hacking and slobbering sick.

Geeeze .. for the love of all things holy ... STAY HOME WHEN YOU ARE SICK!!! UGh .. gotta start a rant on BTS on this!

It seems that consumers are just not willing to spend.

Are you kidding? Not willing to spend money they no longer have or can't put the purchase on their maxed-out credit cards?
The people are going to have to pay for ALL the bail-outs. Now there is another industry asking for bail-out money. Where's my bail-out money? Oh yea, I forgot, I didn't make stupid mistakes like BIG company CEO's did.
I don't qualify.
Has anyone noticed that there are no more Pre-Approved credit card junk mails? Why? 'Cause they are not going to lend you any of the money they got from the bail-outs. They are stuffing their pockets with this money as fast as they can. And they even have the audacity to tell us they don't know where the money has gone and it's none of our business as well as saying they don't care to know. That in my mind is called blatant THEFT.




[edit on 26-12-2008 by Muundoggie]

Originally posted by Muundoggie

Has anyone noticed that there are no more Pre-Approved credit card junk mails? Why? 'Cause they are not going to lend you any of the money they got from the bail-outs. They are stuffing their pockets with this money as fast as they can. And they even have the audacity to tell us they don't know where the money has gone and it's none of our business as well as saying they don't care to know. That in my mind is called blatant THEFT.

I don't know what planet you are living on. I've been getting just as many "Pre-Approved credit card" offers as I have always got. I've alsobeen layed off since July with my benefits about to run out...

I am pretty most people would like to have their houses back before they go piss more money away to the big corporations in the traditional celebration of Jesus.

reply to post by FlyersFan


Your observations are absolutely correct. Stores are having tons of visits, people are everywhere and they are buying.

The sales figures are pretty bad but factor in a few things:

- Most stores limited their total inventory purchases for the Christmas season due to lack of available credit in the Fall and also due to lowered forecasts of the shopping season.

Most stores are competing for visits so they have lowered prices to rock bottom, so the stats were bound to be down.

Most stores barely hired any Christmas staff, so they are not spending money on payroll.

To me, this number shouldn't shock any retailer. When the closings and layoffs start, it won't be due to poor Christmas sales or business declines in 2008 - it will be because of what they expect for 2009.

I share LostNemesis' feelings on the matter. Regardless of the size of the economy, the sales were only down 2-4%. This is nothing! Folks are preaching doom and gloom because at most they got 4 cents less, what about the other 96 cents? I read (maybe in the same article) that profits were down about 18%. Yet the operative word here is profit. Folks still made money.

Our perception is skewed. If we don't have growth, we complain. If we have a slight decrease (and I consider 2-4% to be slight) we moan and groan. In recent times our economy was supported by deficit spending. We were all guilty of putting too much on credit. Now it's time to pay up. The current economic condition is basically a course correction. Personally, I think that if we're paying off our credit like we should and still are spending 96-98% of the level spent last year, we're not nearly as bad off as some would have us believe.

Originally posted by LostNemesis
Did I read that right, or should I re-read it again?

Sales dropped only 4%? What is the big deal, I wonder? I'm truly shocked sales didn't drop MORE than 4%. This tells me people are still spending a lot more than I thought.

Preliminary..

These numbers are VERY BASIC numbers, and technically only represent ONE major credit card processor (Master Card)

These numbers are very incomplete.. but if one firm already found aprox 4% drop, it can be assumed that perhaps Cash transactions declined by more or less then 4% and on top of that, it is quite possible that other major transaction companies like Visa and American Express or Discover may find their drop was greater (or less) then 4%.

ALSO ..

And this is important..

Because of marked down sales, it is VERY POSSIBLE to have higher then expected sales (anything higher then a negative -6%) and LOWER then expected revenue .. and even lower Profit margins (if any?) ..

In other words, Macy's might meet what they consider, for the times, an acceptable decline in sales of Units (items sold).. of -5% compared to one year prior .. However, it might suffer a -10% decline in Revenue, and after tax and operating expenses, in the first quarter of 2009 when they release their earnings reports it might be shown they suffered a staggering loss of Profit for the entire year! ..

And that, multiplied across the Consumer Sector will so drastically hurt the US GDP and Stocks as investors sell of in a frenzy to recoup what losses they will surely suffer, could be the nail in the coffin.

So I say again, depending on the financial healthiness of our Retailers come their Christmas Quarter sales announcements, determines the length and severeness of our Depression.

A lot of people could be loosing their jobs shortly..

[edit on 12/26/2008 by Rockpuck]

Well said Rockpuck!

This is a very complicated equation and all the variables have yet to be determined. I did rant on how I considered the term Plummet to be inappropriate at this time since the writer only talked about a 2-4% average reduction from last year. Of course, if you specialized in top of the line luxury items, your sales really sucked this year. But the WalMarts of the world probably did okay, just like last year.

I will await the final verdict and then will either join the ranks of "I told you so's" or eat my serving of crow.

I would consider anything -6% and above to be a GOOD thing for the economy, and the preliminary reports are very broad ranging.. from -2% to -11% ..

Anything lower then -6% in general is honestly very bad.. the largest portion of the US GDP is Consumer Spending, meaning -6% or more could turn into -3-4% drop in GDP.

Honestly. It could be that bad. It would also lead to further layoffs and closing of another aprox 10k stores nation wide.

But I have to agree with you, high end retailers took the brunt of the burden, stores like Walmart (or only walmart actually) will still profit, but other cheap retailers won't suffer nearly as bad.

On the upside, if you ARE looking to buy jewelery or something, wholesalers are desperately looking for sales at the moment.

Just for the record, the word "plummet" was in the title of the first cited article.

The second article in the OP seems to have a more comprehensive collection of sources and data. It is worth a quick look.

While I don't dispute the figures in the OP, my observations are puzzling.

The Saturday before Christmas, there were lines of cars for at least a mile on the highway exit ramp leading to a local mall. The crowds were enormous everywhere I went. And people were carrying bags and bags of purchases.

I don't know; maybe it's a regional thing?

reply to post by jsobecky


Actually I noticed the same thing locally around DC.
(It's a xmas miracle, we agree on something)

Though I am always hesitant to extrapolate from my own experience to draw a conclusion on the whole.

The truth is that the OP just as the cited articles within it are preliminary and of limited scope at best. Plus, I can't believe that anyone would have expected different.

After all, expectations are the building block of disappointment!

Things apparently are going well for Amazon.com, they reported their highest holiday sales ever, volume-wise at least. .

news.yahoo.com...;_ylt=AhbxqbL3aea6ccmPNk9iiSCyBhIF