U.S. retailers may see the worst sales growth this holiday season since 2002 as shoppers grapple with $3-a-gallon gasoline and consumer prices that rose the most in more than two years in November. Target Corp., Kohl's Corp. and J.C. Penney Co. have responded with discounts of 50 percent or more to lure customers.Holiday Sales Highlights
"If the consumer doesn't have money and isn't buying, there's only so much the online channel can do," said Larry Freed, chief executive officer of online research firm ForeSee Results Inc. in Michigan. "To get a 25, 30 percent growth rate is going to be tough."
Retail sales increased 1.2 percent in November, the Commerce Department said in Washington yesterday. That followed a 0.2 percent increase in October, the agency said.
Sales fell 2.7 percent in the seven days through Dec. 8, following a 4.4 percent decline a week earlier, Chicago-based research firm ShopperTrak RCT Corp. said this week. About 12 percent fewer shoppers visited stores last week compared with the same period a year ago, ShopperTrak said.
Shrinking Margins
Stores may further reduce prices, hurting profit margins, to lure bargain hunters. Target, the second-largest U.S. discount chain, and J.C. Penney, the nation's third-biggest department-store company, missed analysts' sales estimates for November. CompUSA, the 23-year-old computer retailer, said Dec. 7 it will shut down after the holidays.
Office Depot Inc., the world's second-largest office- supplies chain, forecast "continued erosion" of sales and earnings in the fourth quarter because of declining demand from corporate customers.
- Shrinking margins
- Fewer shoppers
- CompUSA shutting down
- Plunging online sales growth
- Falling sales 7 days through Dec 8
Oh here it is: Ellen Davis, senior director of the National Retail Federation, says "U.S. Holiday sales are 'recession proof'."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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