Shop Talk
Retailers, consumers and prices
Check Out Line: More good news about rebounding consumers
Check out the latest encouraging news about U.S. shoppers dusting themselves off and shelling out their hard earned cash again.
U.S. consumers spent more in February than expected, despite buying fewer cars and being stuck at home shoveling record amounts of snow in many parts of the country. The U.S. Commerce Department said on Friday that total retail sales rose 0.3 percent, from necessities to luxury items. Excluding motor vehicles and parts, retail sales rose a bigger than expected 0.8 percent in February.
This comes on top of better than expected February sales reported last week at many top U.S. retail chains.
And more improvement is yet to come as U.S. consumers pay off debt and fix their collective balance sheets, freeing up more cash to go shopping, according to a Wall Street Journal report this morning.
Also in the basket:
Walmart cuts prices on staples in Western Canada
Ann Taylor posts surprise quarterly profit
Check Out Line: Warning! Murky outlook ahead for retailers
Check out the latest outlook on October sales at U.S. retailers.
While most industry experts expect a 1.2 percent rise thanks to the weather gods and easy comparisons, the forecast doesn’t really say it all.
For instance, while sales trends have improved from a disastrous October 2008, data on the economy and consumer spending gives mixed signals and indicates shoppers remain cautious.
News of the U.S. economy returning to growth may have renewed some hopes of a revival in spending late last week, but the Commerce Department talked about consumer spending falling 0.5 percent in September.
It may be too early to raise hopes based on expectations for October. One thing is certain — the future is unclear.
Also in the basket:
FWIW, the retail store I work at is in a mall. In October, we had essentially the same customer count and were down about 6%.
Check Out Line: Are consumers spending?
Check out the latest, somewhat confusing, figures on consumer spending.
The Commerce Department said U.S. consumer spending increased 0.2 percent in February, in line with market expectations, after rising 1 percent in January. That makes two straight months of gains.
However, after adjusting for inflation, consumer spending in February fell 0.2 percent.
The data also showed that incomes fell by 0.2 percent after January’s revised 0.2 percent rise. Analysts polled by Reuters had forecast incomes to fall 0.1 percent.
So is this good news or bad news about the state of the consumer?
Here is what Robert Blake, senior currency strategist at State Street Global Markets, had to say:
“There were some revisions to the prior month. In real terms, January was now even stronger than we first thought, but the February number in real terms was actually weaker. Net-net, we are looking at possible spending in the first quarter in real terms that was positive, possibly, a 1 percent gain…which would signal that the consumer has gone a long way to recover from the absolute calamity in the second half of last year when consumer spending dropped 4 percent at an annual rate. So it was a positive report.”
Check Out Line: Falling gas prices mean falling retail sales
Check out the fifth straight drop in U.S. retail sales.
The Commerce Department said total retail sales fell 1.8 percent in November to a seasonally adjusted $355.66 billion following a revised 2.9 percent plunge in October.
Excluding motor vehicles and parts, sales were down 1.6 percent in November after a revised 2.4 percent October fall.
One reason for the decline (besides the struggling consumer) – gas prices. Gasoline sales plummeted a record 14.7 percent after falling 12.9 percent in October, the data showed. Prices at the pump have fallen significantly and that is reflected in the retail sales report, which compiles total sales by gasoline stations.
The data also showed that sales of furniture, electronics and clothing were up in November after decreasing in October. Looks like those Black Friday deals were able to rouse skittish consumers into a spending mode.
But the question remains — how much have retailers put profits at risk to gain sales?
Also in the basket:
Nationally, gas prices have dropped 58% from their highs of July. Seems to me that is within snicker distance of the oil price drop. But what do I know? I’m just a consumer analyst.
Sorting through Black Friday data
Black Friday has come and gone but what on earth happened at the cash registers over the Thanksgiving weekend? The data is trickling in, and so are the early critiques. (See our previous blogs: Treat Black Friday reports cautiously and Black Friday data spurs more questions than answers)
Here is a break down of the latest reports and what data is still to come:
According its 2008 Black Friday Weekend survey, conducted by BIGresearch and published on Sunday, the NRF said more than 172 million shoppers visited stores and websites over Black Friday weekend (which includes Thursday, Friday, Saturday and projections for Sunday), up from 147 million shoppers last year.
Shoppers spent an average of $372.57 this weekend, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion, up from $34.6 billion a year ago.
The results came from a survey that polled 3,370 consumers from Nov. 27-29. The consumer poll has a margin of error of plus or minus 1.7 percent.
ShopperTrak:
There’s still a lot of people working, a lot of people with cash, a lot of people with credit. Those people are always prepared to buy – if the price is right. Thanks to sites like http://www.blackfridayads2009.info which utilizes both ads scans and relevant links and hot deals available now, there will be plenty of action and sales on Black Friday. The only people who need to slow down their spending are the elected people in Washington DC 
Check Out Line: The short-lived tax rebate boost
Check out the fading influence of tax rebate checks.
Tax rebate checks helped boost June retail sales but their influence appears to have petered out by July, according to data released by the Commerce Department on Wednesday.
The figures showed that total sales at U.S. retailers declined 0.1 percent in July, which was in line with forecasts made by Wall Street economists. A big reason for the drop was a fall off in auto sales. Auto and auto parts sales fell 2.4 percent in the month, their biggest drop since April, and were off a whopping 10.5 percent from year-ago levels.
But excluding autos, retail sales were up 0.4 percent in July. That was roughly in line with forecasts, but down from a 0.9 percent rise in June.
Economists said before the numbers were released that spending has been supported by government stimulus checks but that the stimulus effect was waning in July because most of the checks already have been issued. Meanwhile, prices for many food items are on the rise and there was only a slight moderation in gasoline prices during the month.
The Commerce Department said gasoline sales in July were up 0.8 percent after a 4 percent June jump. But reflecting higher prices, gasoline sales were 24.6 percent higher than in July last year.
Excluding gasoline, retail sales in July fell 0.2 percent after a 0.1 percent June decline.
Check Out Line: Billions can’t rescue retail sales
Check out all those billions of dollars in U.S. tax rebate checks failing to give June retail sales much of a boost.
The Commerce Department said on Tuesday that total sales at U.S. retailers rose a less-than-expected 0.1 percent in June. Economists polled by Reuters had forecast total retail sales to rise 0.4 percent in June, following a 0.8 percent gain in May.
Part of the weaker-than-expected results were due to falling demand for cars. Auto and auto parts sales fell 3.3 percent in June — their worst month since February 2006. But even excluding autos, retail sales rose 0.8 in June, which was below the consensus estimate of 1.0 percent. Excluding autos, building supplies and gasoline, retail sales rose 0.4 percent in June.
Economists had expected government tax rebate checks to give a bigger boost to retail sales in June, despite the weak overall U.S. economy, as shoppers had excess cash to spend. But last week, major retail chains, like J.C. Penney, Target and Gap, released their June sales results and many did not see a rebate boost. Penney said it might have received a “modest” sales lift from the checks but any benefit would be “short lived.”
So where did the billions of rebate cash go?
Well, Wal-Mart got a chunk. Its June U.S same-store sales rose at their highest level in years as traffic in its stores jumped. The retailer had offered to cash tax rebate checks for free.
Surging gasoline prices likely gobbled up an even bigger chuck of the rebate dollars. The Commerce Department said gasoline station sales rose 4.6 percent in June as motorists faced higher prices at the pump. Over the past year, gasoline station sales have jumped 24.5 percent to nearly $46 billion last month, on a seasonally adjusted basis.
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Resident Shop Talk Expert
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