Lean inventory may be the secret weapon that retailers are depending on to survive the holiday season with earnings intact.

But consumers don’t exactly seem to be quaking in their boots at the prospects of finding empty racks this Christmas season.

According to the ICSC, with 18 days until Black Friday and 46 shopping days until Christmas, the consumer appears “unfazed” by reports of retailers running low on inventory.

The ICSC and Goldman Sachs’ 2009 Holiday Spending Survey found that 81 percent of consumers said lean inventories are not motivating them to shop earlier than in past seasons.

One culprit behind the nonchalance?  Gift cards.

According to the survey, 48 percent of holiday shoppers said that if they can not find the gift item they are looking for, they will buy a gift card.

“It is surprising that consumers are not willing to shop early for holiday gifts to get the best selection,” said Michael Niemira, ICSC’s chief economist.  “Bargains seemingly may matter more than selection for the consumer, which is why more consumers this year than in any recent time plan to shop on the day after Thanksgiving (16%) —which now should be dubbed Bargain Friday.”

(Photo: Reuters)

Check out the grim unemployment numbers from the U.S. Labor Department on Friday, a day after dozens of retail chains reported lackluster October sales.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, driving the jobless rate to 10.2 percent, the highest in more than 26 years.

Analysts polled by Reuters had expected the monthly unemployment rate to edge up to 9.9 percent from 9.8 percent in September.

While job losses have been mounting for months, some analysts and economists say 10 percent unemployment could deal a new psychological blow to U.S. consumers who might previously have felt that the economy was beginning to stabilize.   

Just last week, news that the U.S. economy had returned to growth instilled hope for a rebound in consumer spending. But the latest reports on retail sales and joblessness suggest that such a result may be further down the road.

So, no matter what gimmicks retailers resort to – be it $10 DVDs or upscale wines – the customer, spooked by an almost daily dose of gloomy economic data, may still be unwilling to open their wallets.

Also in the basket:

Target fights Wal-Mart with $10 offers on DVDs

Hermes outshines rivals, optimistic about Christmas

Kraft in waiting game as Cadbury deadline nears

(Photo/Reuters)

Check out who is shopping early for Christmas.
 
U.S. consumer are, according to a new Accenture survey, which showed that 69 percent of shoppers plan to do the bulk of their holiday shopping by Dec. 7.  That’s up from 60 percent a year earlier.
 
More than half (52 percent), plan to shop on Black Friday (the day after Thanksgiving), up from 42 percent last year.
 
The game of chicken between retailers and shoppers over discounts may be more intense this year after retailers had to practically give the store away in 2008 to clear inventory in the middle of the recession.
 
The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets, the survey said.
 
“We have seen a ’shift to thrift’ across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season,” Janet Hoffman, managing director of Accenture’s Retail practice, said in a news release.
 
Gift cards may also come back, with 79 percent of people saying they will give them and 59 percent saying they really want them.
 
Also in the basket:
 
Cadbury’s bumper Q3 puts pressure on suitor Kraft
 
Altria revenue misses estimates
 
P.F. Chang’s profit misses; ups ‘09 outlook

(Reuters photo)

Check out a rather glum outlook for the Christmas shopping season.

Last year, holiday sales notched their worst performance in nearly four decades.

This year, they could be a “train wreck” says Britt Beemer, founder and CEO of America’s Research Group.

According to the latest Consumer Mind Reader survey released by America’s Research Group and UBS, 81 percent of respondents said they are pressured by family debts, forcing many to shop less and spend less. 

 “The data foretells a very scary Christmas shopping season with consumers radically cutting back at a time when retailers need shoppers to shore up sagging retail sales,” Beemer said. 

“I am fearful Christmas will be a retail train-wreck this year.”

Earlier this week, Beemer told Reuters that U.S. consumers are still cautious about eating at restaurants and are not planning to loosen the purse strings for holiday spending this year despite signs the economy is improving.

“Everybody wants the recession to be over, but nobody has told the consumer,” Beemer told Reuters.

According to the survey released on Thursday, more than three quarters of families are trying to cut back on how much they are spending.  The average amount that American consumers are cutting out of their monthly spending is $191.11, the highest figure ever recorded for spending cuts in 13 years of ARG Consumer Mind Reader surveys.

Of consumers cutting back, 60.1 percent said they have accepted this new, lower spending level — even when the economic situation improves and they could afford to spend more. 

Also in the basket:

New normal? U.S. consumers coming back cautiously

Pier 1 posts smaller-than-expected loss on cost cuts

Dan Brown novel breaks one-day sales records

Gowns go with the flow on New York fashion runways

Fashion Houses Forced to Test Radical Ideas (WSJ)

(Photo: Reuters)

Check out some shoppers saving for holiday gifts.

Yes, it is still summer, but a comparison shopping Web site decided to find out how recession-weary shoppers feel about spending for the upcoming winter holidays.
 
Just over 75 percent of respondents to PriceGrabber.com’s recent survey said they are more concerned about the cost of holiday gift-giving this year.  So, how many are starting to save earlier?  Only 41.1 percent.

Here’s a quick breakdown of the survey from PriceGrabber.com:
 
Compared to the 2008 holiday season, are you more concerned about the cost of holiday gift-giving this year because of the recession?
 
35.2% Yes, I am highly concerned
40.1% Yes, I am moderately concerned
24.7% No, I am not at all concerned
 
Are you planning to start saving money for holiday gift-giving earlier than last year because of the recession?

41.1% Yes, I am planning to start saving money earlier than last year
20.9% No, I am planning to start saving money at the same time as last year
2.2% No, I am planning to start saving money later than last year
35.8% No, I do not save money for holiday gift-giving
 
When do you expect to start saving money for holiday gift-giving for the 2009 holiday season?
 
17.4% July
15.2% August
15.3% September
9.7% October
5.7% November
0.9% December

And, the group with the largest number of responses to that question — 35.8% — said they do not save money for holiday gift-giving.
 
The survey of 1,777 online consumers was conducted July 20 to Aug. 10.

Also in the basket:

AnnTaylor profit tops views, but outlook tempered

Average gamer is 35, often overweight and sad, study says

Back-to-school looks weak for apparel retailers

Duane Reade pumps up beauty side (WWD, subscription required)

(Reuters photo)

After Wal-Mart (which is now calling itself Walmart) reported quarterly results, the media was given about half an hour to ask its Chief Financial Officer Tom Schoewe (pictured at left) questions.

We asked about its quarterly results, how back-to-school is shaping up (and for that matter, what about Christmas?), how are consumers faring and what about this call for employer mandated health care coverage?

Here are his answers to some of our questions (Most of the questions have been paraphrased):

Q:How were you able to post earnings per share at the top end of your forecast range while sales came in lower than expected?

“We’ve talked over time about the importance for us to manage inventory. Obviously, when you’re missing your sales expectations that becomes even more challenging than ever. This quarter Eduardo Castro-Wright and his team managed inventory well below the change in sales and that just allows you to operate a far more efficient business – there’s less clutter in the store, we have less in the way of inventory shrinkage, we have less in the way of merchandise mark downs.”

Q: How are consumers holding up? What are you seeing in terms of the paycheck cycle — when Walmart sees its sales decline as shoppers run out of money in between paychecks?

“We still see that … pronounced paycheck cycle. So it tells me that our customer remains under a significant amount of pressure. … The trend that we’ve seen away from credit … that trend continues. You see less in the way of credit, more in the way of cash and debit.
 
… Many of our customers receive food stamps, welfare, other forms of government assistance. On the first of the month their EBT card would be charged, and we can see literally real-time once the clock strikes midnight and EBT cards are charged, you can see our results start to tick up.”

Q: Can you provide any forecast for the year-end holidays?
    
“It’s hard to say. I think it’s going to depend a lot on consumer sentiment right at the time. What we’re doing right now is our best to buy the kinds of things that we think are the best value.

… Let’s face it, this Christmas, probably more so than in the past, I think you’re going to see customers really looking for value. I think Christmas will be just fine.”
    
Q: Do you think it’ll be somewhat better than last year given how quickly things fell apart so close to Christmas last year?

“I think last year was a very, very unusual time, and I’m hopeful they’ll be better than last year.”
   
Q: What are you seeing in back-to-school shopping, and what might that tell us about how parents will spend for Christmas?
 
“For any seasonal event, shopping happens closer to the event. We’re seeing that in back-to-school. We saw that last year at Christmas. My guess is as we motor toward Christmas this year, you’re going to see people putting off their spending right until the end and looking for just the best value. 

… On back-to-school, what I would tell you is the calendar is not always the same, and back-to-school at this point this year is a little bit later just because of the calendar when schools are starting … but we’re right in the middle of back-to-school now, and what I would tell you is we feel `mpretty good about our position in back to school.”

Q: Does Walmart, with its support of employer mandated health care coverage, believe the cost of health care should be spread around to many employers?
          
“We think that’s the most effective way for the nation to grapple with the issue at hand, which is costs are rising at a very rapid rate and the more people that are included, the easier it would be to leverage costs.

The  reason that you saw us weigh in … really just speaks to the need to get as many people covered as we can. One of the main reasons that health care costs are so high is that there are 45 or 47 million Americans that don’t have any insurance and the cost of their health care gets spread across everybody else, so as you increase that base, you have a better chance to leverage expenses.”

(Photo: Reuters)

It’s the story that keeps on giving as more and more organizations hold “Christmas in July”-type events in the final nine days before the timeline becomes unusable.

Today’s entry comes from the Detroit Tigers, who announced that they will be celebrating the unseasonal holiday in style this Thursday, transforming Comerica Park into a winter wonderland complete with live holiday music, toys soldiers, Christmas trees and yes, the man himself, Santa Claus, will be there.  He’ll even be bringing some of his elves.

The event, now in its second year, will also include some of the Salvation Army’s familiar bell-ringing workers, known to normally flank store entrances in Santa hats during the holiday season, collecting money for the poor.

Naturally, Santa will be throwing the first pitch–although it’s unclear whether or not he’ll be wearing his typical suit, or perhaps a more seasonal pair of shorts and a Hawaiian shirt?  Dr. Seuss’ Christmas-Stealing Grinch will lead the audience in “Take Me Out to the Ballgame” during the 7th inning stretch.

No word yet on whether the Holiday Armadillo has been invited to the festivities.

(Reuters photo)

Santa’s not getting any rest this year.

After U.S. retailers posted the longest running decline in same-store sales in nearly a decade, Sears, Kmart and Toys R Us announced Christmas-themed sales for the month of July.  While actual sale dates and locations vary among the three chains, the event has drawn a lot of attention from news media, which had the once-in-a-year joy of headlining a story with “Christmas in July.”

Not to be outdone, Disney has sent a train to 36 states around the country to promote its new animated film “A Christmas Carol,” slated for release this November.  Yes, November.

The re-purposed Amtrak train is filled to the brim with Disney Christmas items, the latest in cinematic 3D audio and video equipment, a lot of HP computers, and even artifacts on loan from the Charles Dickens Museum.  Oh, and it has a picture of Ebeneezer Scrooge on the front.

Whether any of these campaigns will work is anyone’s guess.  But for now, at least, it gives us all a chance to laugh and play and maybe even listen to some Bing Crosby records.

Christmas is much more expensive this year. At least it is if you go the swans-a-swimming and geese-a-laying route.
 
PNC’s Christmas Price Index was up 8.1 percent this year, the second biggest leap in the 24-year history of the index, which is based on the holiday classic “The Twelve Days of Christmas.”
 
The biggest culprit for the increase? Those darn seven swans-a-swimming, which will costs $5,600 this year, compared with $4,200 in 2007, PNC said.
 
PNC also puts out a core Christmas Price index, which excludes the highly volatile swan sector. That core CPI was up just 1.1 percent.
 
PNC CPI’s sources range from retailers to the National Aviary in Pittsburgh and Philadanco, a modern dance company in Philadelphia.
 
Commodities prices, concerns about increased energy and shipping costs, jobs and a second straight minimum wage increase were major factors in the cost of the index, James Dunigan, managing executive of investments for PNC Wealth Management, said.
 
Prices for turtle doves, partridges and pear trees are also all up more than 30 percent, PNC said.
 
But if you want to save some money, see if your true love will let you get away with only the five golden rings — which are down 11.4 percent this year at $349.95.
 
Hey, there is a recession on, you know.

(Reuters photo)

How's this for a merry little Christmas?

Before the U.S. holiday shopping season even begins, Morgan Stanley's chief U.S. economist has given up on consumer spending -- not only through Christmas '08 but all the way until next summer at the earliest.

"As we see it, the current collapse in consumer spending likely will be the most severe and longest in the postwar (World War Two) period," economist Richard Berner wrote in a note to clients. "The recovery in consumer spending likely will be moderate as consumers embark on a long period of rebuilding thrift.

Why so grim? Well, between the 1.2 million jobs lost since the beginning of the year and the downdraft in the housing and stock markets, income is taking a hit and household wealth is down about $7 trillion. Yes, trillion with a 'T.' Oh yeah, and there's that credit crunch.

Berner calls this the "perfect consumer storm" and says it will rage until mid-2009.

Now that you're thoroughly depressed, we should mention the silver lining. The drop in gasoline prices to $2.45 per gallon from $4 represents $225 billion in consumers' pockets. Add in another round of fiscal stimulus and it should limit -- though not offset -- the other strains on the system.

"Done right, and coupled with other policies to mitigate the credit crunch and foreclosures, these steps should promote a modest recovery beginning in 2010," Berner said.