Retailers, consumers and prices
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.
With so many forecasters talking about the 2008 holiday season in extremes (the weakest since 1970, one of the worst in modern times), it’s refreshing to hear an executive suggest that, ok, things were not great, but they weren’t horrible either.
That assessment came on Wednesday from Rob Sands, chief executive of Constellation Brands, when the world’s largest wine producer and maker of Robert Mondavi, Vendage and Ravenswood wines reported third-quarter earnings.
Check out the days of reckoning for retailers.
This week most U.S. retailers will tell us how December sales went. The news is not likely to be good.
According to Thomson Reuters data, Wal-Mart is about the only one that saw an increase in same-store sales. With a recession, job losses, falling home values and tighter credit, it’s not surprising that most people cut back and that sales fell for most retailers.
But what will be more telling is how much the big sales — like Jos A Bank’s three-for-one suit sale — lead to profit warnings by retailers. Those deep discounts may move merchandise (though even that is debatable in this environment), but they come at the expense of profits.
Retail stocks have actually outperformed the broader market in the past month. But the depth of the profit warnings will likely determine whether those retail stocks also go back on the discount rack.
Also in the basket:
UK retailers ease Christmas fears, but gloom lingers
Smoking ban in cafes puts French off cigarettes
Coming down on tobacco (N.Y. Times)
“There’s no question there’s some pent-up demand,” as over the past three months consumers saved and paid off their credit cards bills instead of spending, said Stifel Nicolaus retail analyst Richard Jaffe.
The Paris-based Organization for Economic Cooperation and Development says the U.S. economy has probably slipped into a recession that will last through the middle of 2009.
But forget Paris, you don’t need to look any further than today’s results from apparel retailers for proof that the U.S. economy is in a slide.
Online retailer Overstock.com is pitching a rescue package for shoppers who are neck-deep in debt.
The company’s “Family Bailout” contest will pay off up to $50,000 in debt belonging to the winner or a member of his or her immediate family. The money gets paid directly to “qualified” creditors like mortgage or credit card companies.
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.
In an interview after Hasbro — known for its Monopoly board game and My Little Pony toys — posted a third-quarter profit that beat Wall Street expectations, CEO Brian Goldner said one heartening outcome of the financial crisis was that crude oil prices have fallen in recent weeks, which has translated into lower prices at the pumps for consumers.
Elmo Live is Fisher-Price’s latest version of the Sesame Street fixture, after Tickle Me Elmo in 1996 and TMX Elmo in 2006. Fisher-Price is a unit of top U.S. toymaker Mattel Inc.