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.
Oh, God no! Please not... Discounts!!! Nooooooo!!!
Unless I missed it, it’s interesting they say nothing about Internet sales how it almost doubles evey year in the past 5 years.
Shhhh! You’ll get them thinking of internet taxes!
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.
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.
As gas prices rise, so will internet sales.
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.
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.
Not to worry, Americans will just dip into their savings to go Christmas shopping, right?
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/
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.?”
5 and 10 yo boys - trains. They’ll never grow out of them.
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.
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.
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
Good. I was looking for a cheap loom.
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?
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!
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