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It looks like Santa’s on his way: Holiday store discounts loom...
The Tacoma News Tribune ^ | November 12, 2007 | Sandra M. Jones

Posted on 11/12/2007 2:39:54 AM PST by 2ndDivisionVet

A disappointing October sales report Thursday sent a clear signal to retailers that they’ll have to pull out all the stops to get shoppers into their stores this holiday as declining home values, tighter credit terms and rising gas prices appear to have left consumers feeling spent.

The nation’s biggest chain stores posted the second consecutive month of weak sales results, underscoring their concerns that sales growth this holiday season could be the slowest in five years.

“Consumers are exerting a lot of caution,” said Mandy Putnam, vice president at TNS Retail Forward Inc., a Columbus, Ohio-based market research and consulting firm. “Even with the number of promotions breaking early right now, retailers are really going to have to work hard to get them into the stores this season.”

Many retailers blamed the weather for some of the shortfall, suggesting that an unusually warm October deterred shoppers from buying fall sweaters, fleece and coats.

“It’s going to be a heavy discounting holiday season,” said Chris Terry, an analyst at Hodges Capital Management, which owns Kohl’s and Costco among its $1.3 billion in assets under management. “Consumers are getting stretched. Discounts are going to be more widespread.”

Sales at chain stores opened at least a year rose 1.6 percent in October compared with the same month last year, and below the forecast of 2.4 percent growth put forth by the International Council of Shopping Centers. September sales rose 1.7 percent.

Consumer spending drives the economy, accounting for more than two-thirds of economic activity. If consumers stop spending, it’s “highly unlikely” that the U.S. will be able to avoid a recession, said Scott Hoyt, director of consumer economics at Moody’s Economy.com in West Chester, Pa.

“Clearly the economy is in a more uncertain position and there are fears of a recession we haven’t had in a few years,” said Hoyt. “Therefore you want to watch the biggest piece of the economy very carefully.”

Wal-Mart Stores Inc., the world’s largest retailer, eked out a 0.4 percent sales increase by getting a jump on the holiday with early discounts on toys and electronics. Midtier department stores and mall-based specialty stores fared poorly, posting across-the-board declines. The lone standouts were luxury department stores.

Same-store sales fell 3.8 percent at Kohl’s Corp., 1.8 percent at J.C. Penney Corp. and 1.5 percent at Macy’s Inc. Even Nordstrom Inc., which had been largely untouched by the slowdown thanks to its upscale slant, saw its same-store sales fall 2.4 percent.

Among specialty stores, same-store sales were even more disappointing, falling 8.0 percent at Gap Inc., 6.0 percent at Limited Brands Inc., 4.2 percent at AnnTaylor Stores Corp. and 10.6 percent at Chico’s FAS Inc.

Stores that attract affluent shoppers outperformed in large measure the rest of the industry. Same-stores sales rose 8.5 percent at Neiman Marcus Group Inc., 10.6 percent at Saks Inc. and 9.0 percent at Costco Cos. Inc.

Target Corp., the discounter that caters to a higher-income shopper than rival Wal-Mart, reported a 3.9 percent same-store sales gain but warned investors that its stores are experiencing “soft sales in our higher-margin categories.”

Same-store sales measure sales at stores open at least one year and are a closely watched measure of a retailer’s health. Retailers typically generate 20 percent to 25 percent of their annual sales in November and December.

Wal-Mart, Target and J.C. Penney forecast that same-store sales will increase in the low single digits in November.

So far consumers have managed to continue to spend even as the housing and credit markets tumble. But economists are watching this holiday closely to see if consumer behavior changes.


TOPICS: Business/Economy; Culture/Society; Extended News
KEYWORDS: christmas; consumerconfidence; consumers; demographics; discounts; economics; economy; employment; gasprices; holidays; holidayshopping; housing; inflation; itscalledchristmas; jcpenney; jobs; recession; retail; retailers; sears; shopping; spending; subprime; target; theholidayhasaname; walmart

1 posted on 11/12/2007 2:39:57 AM PST by 2ndDivisionVet
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To: 2ndDivisionVet
Holiday store discounts loom...

Oh, God no! Please not... Discounts!!! Nooooooo!!!

2 posted on 11/12/2007 2:55:45 AM PST by gridlock (Recycling is the new Religion.)
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To: 2ndDivisionVet

Unless I missed it, it’s interesting they say nothing about Internet sales how it almost doubles evey year in the past 5 years.


3 posted on 11/12/2007 3:25:13 AM PST by A Navy Vet (In perpetuum sacramentum (An Oath is Forever))
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To: A Navy Vet

Shhhh! You’ll get them thinking of internet taxes!


4 posted on 11/12/2007 3:39:01 AM PST by ABN 505
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To: A Navy Vet

Or how the lead/date rape drugs in made in china toys could impact their toy sales....I’m not buying the junk for my grand kids, I love my grands to much to risk it. Now what do you get 5 and 10 year old boys? The girls are easy, I can sew something.


5 posted on 11/12/2007 4:18:06 AM PST by GailA (Make Valor Quilts for our wounded Troops....I'm a quilt-aholic....Go Fred Go!)
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To: GailA

Purchase products that are 100% MADE IN THE USA!

Continue to take a stand and be a voice for our pets and our loved ones! Do everything you can to boycott goods made by China and this includes ingredients made in China, Chinese plant processing and Chinese exporting!

Our animals couldn’t speak for themselves.
Were they the canaries of the food chain?

We have to protect our families now.
BOYCOTT CHINA!!!!!!

Here is a list of a few items made in USA.

Made in USA
www.ussstuff.com

www.madeinusa.com
www.stillmadeinusa.com
http://www.coopamerica.org/programs/rs/profile.cfm?id=246
http://travel.discovery.com/Ratzenberger-America_Goods_Goods.shtml
http://howtobuyamerican.com/
http://www.allbusiness.com/north-america/united-states-utah/444718-1.html
http://www.americanapparel.net
http://www.jwod.com/
TOYS made in USA
www.FatBrainToys.com

www.ShopForAmerica.com
www.ZebulonUSA.com
www.usmadetoys.com
www.unclegoosetoys.com
www.holgatetoy.com
www.maplelandmark.com

In addition if you patronize craft shows, most of them have American-made handmade crafts.


6 posted on 11/12/2007 4:19:15 AM PST by sweetiepiezer (Duncan Hunter .....................a man of his word.)
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To: A Navy Vet

As gas prices rise, so will internet sales.


7 posted on 11/12/2007 4:22:59 AM PST by mtbopfuyn (I think the border is kind of an artificial barrier - San Antonio councilwoman Patti Radle)
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To: GailA

Open an IRA. I know it sounds boring but they will thank you big time later. Plus you can give them a 10 spot to satisfy the instant gratification. I wish my Grandparents would have done this for me. All those toys and things were nice but a head start on an IRA would surely be something I would think about over the life time.


8 posted on 11/12/2007 4:37:29 AM PST by napscoordinator
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To: sweetiepiezer

I checked out several of them, most of the toys are for very young children...my 5 year old grandson looks like a 10 year old line backer, the 10 year old is about the same size. I found a skate board for the 5 year old, which is not made in china, guess I should get another one for the 10 year old.


9 posted on 11/12/2007 4:47:30 AM PST by GailA (Make Valor Quilts for our wounded Troops....I'm a quilt-aholic....Go Fred Go!)
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To: 2ndDivisionVet
declining home values, tighter credit terms

Not to worry, Americans will just dip into their savings to go Christmas shopping, right?

10 posted on 11/12/2007 5:28:35 AM PST by Notary Sojac (Bring Back Paul Volcker!!)
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To: 2ndDivisionVet; Lijahsbubbe
A disappointing October sales report Thursday sent a clear signal to retailers that they’ll have to pull out all the lethal made in China shlock and stock real products.
11 posted on 11/12/2007 5:32:11 AM PST by Thinkin' Gal
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To: GailA

Here is a list of hot items for Black Fridsay, but it looks like a lot are masde you know where.
http://blackfriday.gottadeal.com/


12 posted on 11/12/2007 5:39:37 AM PST by sweetiepiezer (Duncan Hunter .....................a man of his word.)
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To: Thinkin' Gal

I wonder what parents tell the child workers in China?

“Santa’s not giving many toys this year, so your production level is going to be lowered.?”


13 posted on 11/12/2007 6:23:22 AM PST by Lijahsbubbe
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To: GailA

5 and 10 yo boys - trains. They’ll never grow out of them.


14 posted on 11/12/2007 6:25:19 AM PST by cinives (On some planets what I do is considered normal.)
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To: A Navy Vet

Online is the only way to go: You can immediately compare prices; and you don’t have to put your shoes on to get there.


15 posted on 11/12/2007 6:25:53 AM PST by bannie
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To: GailA

Son and I are hand making some woodworking gifts for the family this christmas.

I’m still buying store bought toys etc, for the kids, but I figure these things Son and I make together will be far more meaningful to those who recieve them and will leave life long lessons and memories for me and Jr.

Home Depot and Lowes have gotten more of my $$ this year.


16 posted on 11/12/2007 6:31:19 AM PST by HamiltonJay
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To: 2ndDivisionVet
BS of the type in this article pops up EVERY SINGLE pre-Christmas season. I read them every year.....the wailing and gnashing of teeth about a possible horrible holiday retail catastrophe.

As far back as I can remember, stores start discounting way before Christmas, yea verily before Thanksgiving. If folks only knew the mark-up on retail goods, they'd know that the commercial trade still make a damn pretty penny on discounted goods if they advertise effectively thus producing volume.

This tripe is produced by emotional writers who have nothing better to do than create holiday shopping hysterias of all stripes. Thankfully, Christmas after Christmas shoppers pay no attention to these doomsday scribes but plod on, buying things they need and don't need during the holidays with the usual dedication.

After the holidays the retailers and CEOs smack their lips with satisfaction as they do every year, even though they protest business was "not too good".

Then they and their families take off for a two-week new year's vacation in the Bahamas.

Leni

17 posted on 11/12/2007 6:39:44 AM PST by MinuteGal (Three Cheers for the FRed, White and Blue !!!)
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To: 2ndDivisionVet
Holiday store discounts loom...

Good. I was looking for a cheap loom.

18 posted on 11/12/2007 6:42:45 AM PST by wideminded
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To: All

Is it just me, or does everyone have pretty much what they need? We don’t buy much anymore for the holidays, even birthdays, because the gifts don’t mean as much. I know I grew up poor—didn’t own a new pair of jeans until I was 14, and I bought those. Nowadays, you mention hand-me-downs and kids just about have a stroke. At some point,it just seems like the buying has to level off. Any thoughts?


19 posted on 11/12/2007 8:57:15 AM PST by gardengirl
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To: gardengirl

I agree. The kids have everything then need and want. I hate to buy toys for my 4 year old. She has inherited all her older sisters toys. I may just wrap the toys she has not played with or looked at in years!


20 posted on 11/12/2007 9:03:56 AM PST by angcat ("IF YOU DON'T STAND BEHIND OUR TROOPS, PLEASE FEEL FREE TO STAND IN FRONT OF THEM")
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To: angcat

I’m not advocating not giving gifts. I love to give, more than to receive. It’s jsut a different world. My kids have more in their bedrooms than I had when I got married. They think nothing of going to Bojangles every morning for breakfast—their money, so... When I was little—oldest of five—I can only remember going to MacDonald’s once or twice, and we had to split a burger and fries.


21 posted on 11/12/2007 9:15:52 AM PST by gardengirl
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To: gridlock

What discounts? The stores mark up the price of an item by 50% then put in an ad that they are marking down the item by 15% and people think that this is a discout when in fact it’s really a mark up og 35%.

Some discont.


22 posted on 11/12/2007 9:22:04 AM PST by chiefqc
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To: gridlock

Oh go out and buy. Go into debt so we can give the Dems even more wild thorns up their you know what to raise taxes and cut all those deficits that bad old consumers will account for. I am so sick of Dems, taxes, and the nonsence of deficits that I say, let the markets decide. Period. Go for those discounts and keep everybody happy but the Left.


23 posted on 11/12/2007 11:10:06 AM PST by phillyfanatic
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To: GailA
Now what do you get 5 and 10 year old boys?

That's easy. Make homemade slingshots and get a bag of gravel from the gravel pit.

Then sit back and enjoy and see which comes first; the boys run out of "ammunition" or neighbors, out of windows ;-)

24 posted on 11/12/2007 12:20:40 PM PST by varon (Allegiance to the constitution, always. Allegiance to a political party, never.)
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To: chiefqc
50% markup before all of the other costs of running a business. Retails NET margin after all is said and done is one of the lowest (if not the lowest) of any industry out there. Walmart sells something in the neighborbood of 380 billion each year and yet net only around 11 billion (around 2.9% net of sales [The private retail company I work for nets around 7.5% of sales]). Exxon had 400 billion in sales and netted around 40 billion or nearly 4x the overall gross (10% net of sales). Citi had revenue of 62 billion and a net of around 18 billion--and that's during the huge subprime crises or a whopping 25% net of sales.

Retail cutting prices 15% indeed does have a huge impact on their business.

25 posted on 11/12/2007 8:04:50 PM PST by rb22982
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To: 2ndDivisionVet
Why would I want to buy a loom?!


26 posted on 11/12/2007 8:06:21 PM PST by Revolting cat! (We all need someone we can bleed on...)
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