Retailers, consumers and prices
Check Out Line: Another week, another sales drop
Check out sales falling again in the latest week.
The International Council of Shopping Centers-Goldman Sachs chain store sales index showed a 1 percent drop in the week ended Saturday, the worst week since April 5. Year-over-year, the index increased four percent.
But the ICSC did point out some positive factors for retailers: traffic improved at discounters, department stores, wholesale clubs and even apparel retailers.
Perhaps consumers can afford to drive to those stores again.
According to the U.S. Energy Information Administration, the average retail price of a gallon of regular-grade gasoline in the United States fell for the eighth consecutive week to $2.22 on November 10. That’s a $1.61 per gallon drop since September 15, ICSC noted.
Even the rising unemployment figures could be interpreted in a positive light.
A J.P. Morgan research report notes that in the past five recessions, unemployment increased by about 2.5 percentage points from the low to the high, while retail stocks bottomed about halfway through.
“Although we’re not ready to call a bottom, we’d note that unemployment has increased (1.7 percentage points) from its recent sustained trough in February 2008, more than the historical halfway mark of past recessions,” analyst Charles Grom wrote.
The unemployment rate was 6.5 percent in October and J.P. Morgan economists see it peaking at 8 percent in the second quarter of 2009, so by that estimate, the rise in unemployment is more than halfway done.
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