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Retail sales are an important economic indicator because consumer spending fuels a large part of first world economies. Inded, think of all persons and companies involved in the production, distribution and sale of products that you use on a daily basis, like food, clothing, fuel, and other items.
September Retail Sales Bounce at Bottom
Author: Mukesh Buch from 123jump.com
Last Update: 1:41 PM ET October 11 2009
September comparable sales managed to show a small gain on a calendar shift, delayed back-to-school sales and weak comparison to the previous year. Teenage retail related sales were soft in the month.
1:00 PM New York – September comparable sales managed to show a small gain on a calendar shift, delayed back-to-school sales and weak comparison to the previous year. Teenage retail related sales were soft in the month.
After months of sales decline, comparable store sales showed a mild increase in September. Heavy discounting played a significant role in arresting sales fall.
Large and small retail chains managed to show a small rise in sales according to the latest data collected by Thomson Reuters and the International Council of Shopping Centers.
Calendar shift and easier comparison also played a role in the showing a better than expected results. Back-to-school season was pushed in the month from August and a year ago sales were dropping in double digits at most chains.
Teenage retailers reported weaker than expected sales despite the back-to-school sales. Sales at Abercrombie & Fitch, Hot Topic and American Apparel were soft.
Original article appears on 123jump.com
When consumers open their pocketbooks, the economy tends to heat up; retail shelves begin to empty and orders for replacement goods. The plants produce more widgets and raw materials in order for more to come in. This is the law of supply and demand.
If consumers start to feel uncertain about their financial future and decide to post pone purchases of new washing machines, cars, or blue jeans, the economy starts to slow. This is why politicians have resorted to tax cuts to give the economy a boost with their so called stimulus plans; by putting cash into the hands of consumers and having money easier to lend from banks, they hoped to spend their way out of recession. The problem in many first world countries is that their productive capacities have been gutted to third world nations working for slave labor.
Also, the other problem we have now is that the banks are unreluctant to lend money for major purchases. This is why the government has provided stimulus funds, but it is bound to fail because all they are doing is printing money that is not based on anything. It is comparable to lending money to someone when you do not have any money. The lender keeps lending IOU notes essentially, and eventually it will collapse.
Retail report: holiday sales to drop this year
Consumers are still hesitant to spend. For the year, retail sales are expected to decline about 3 percent, says the National Retail Federation.
The retail environment has been daunting for months. And the consumer malaise won’t lift anytime soon, according to one projection Tuesday: Sales this holiday season will be 1 percent lower than last year, says the normally optimistic National Retail Federation (NRF).
If this happens, it would be the second year in a row of declining holiday sales – the first time in 40 years that sales have dropped two years running. Last year, holiday sales were down 3.4 percent.
“This is a very realistic view of what’s happening in retail,” says Scott Krugman, vice president for public affairs for NRF in Washington. “The rate of decline is not so bad, but the reality is this is not a consumer-led recovery and the consumer is not back yet.”
How retailers manage the season could have implications for the economy. If they agree with the NRF analysis, they’re likely to offer more-than-usual discounts and promotions to attract customers. They’re also likely to keep inventory low from the get-go so they’re not stuck with a glut of product in January.
“This is the year consumers can lose the game of chicken,” Mr. Krugman says. “It’s not wise to put off most shopping for the last minute.”
Although the NRF has projected the 1 percent decline in holiday sales, it could be worse. Retail sales for the entire year are expected to decline about 3 percent.
The consumer has been hesitant all year because of declining housing prices and job insecurity. On the positive side, the stock market has staged a significant rally, and retail sales in August – the back-to-school season – were better than expected.
Original article appears on Christian Science Monitor
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