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Retailers, consumers and prices

Check Out Line: Bad jobs data follows bad sales data

November 7, 2008

Check out more bad news for retailers headed into the holiday season.

On Friday, fresh data showed the U.S. economy shed 240,000 jobs in October, worse than the 200,000 decline that was forecast. The Labor Department said the national unemployment rate shot up to 6.5 percent from 6.1 percent in September — the highest since March 1994.

That disappointing report came a day after U.S. retail chains reported their worst October sales results in 35 years.

“October was a disaster of epic proportions for most of the retailing community, as continued economic negatives resulted in a ‘shopping strike’ by consumers and led to material misses by a number of key players and a decidedly more cautious outlook from virtually every player in the apparel sector,” wrote Eric Beder, a retail analyst for Brean Murray, Carret & Co.

Meanwhile, a new Consumer Reports holiday shopping poll found that 76 percent of Americans plan to cut back on spending on holiday expenses like gifts, travel, entertaining and decorations. Among the holiday spending cutbacks, 59 percent said they will be giving fewer gifts, and nearly half said they will be cutting their travel plans.

The weak reports are all darkening the outlook for holiday sales, which were never expected to be great. Now consumers can expect retailers to roll out a plethora of deals and discounts to grab whatever portion of a shopper’s wallet they can get this holiday.

On Friday, Wal-Mart’s Sams’ Club said that starting Nov. 14, non-members who sign up in any location nationwide before Nov. 26 will receive a $10 Sam’s Club gift card. The gift card is good for purchases in its clubs starting Nov. 28, the day after Thanksgiving, when Sam’s Club will open at 5 a.m. and provide a free breakfast through 8 a.m. 

Also in the basket:

General Mills has no issues accessing finance -CEO

Mattel cuts about 1,000 jobs citing economy

(Photo: Reuters)

Comments

Darkening the outlook of sales, of course. The bubble of inflation finally bursted and everyone is scrambling for a solution. Just like a ballon, you can only repair it so many times before you have to throw it away and start on a new one. That is why Obama got elected. People are hoping that the fresh new look will start something new and create growth. I tend to agree.The problem is that companies have gotten so greedy that they no longer care about the jobs americans need to survive. Make the product in China and sell it here. Make the product in Mexico and sell it here. Am I mad that GM wants to close its doors after it has jacked people for all these years at those dealerships? I wont even get into AIG.You want to stimulate the economy? Bring the manufacturing plants back to the US, burn something other than crude oil, and help the unfortunate in this market by wiping their credit slate clean.

Posted by Victor | Report as abusive
 

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