Retailers, consumers and prices
Check out the recession-battered consumer in a new Discover survey.
Consumer attitudes continue to weaken according to Discover’s U.S. Spending Monitor for July, as results fell for the second consecutive month to 83.5 (out of 100) from 85.6.
Translation: Growing pessimism about the economy and personal finances has more consumers planning overall spending cuts.
Only 21 percent expect to spend more in the month ahead, a 2-point decline from June.
“The optimism consumers showed about the economy during the spring has faded during the summer,” Discover Financial Services senior vice president Julie Loeger said in a statement. “Unemployment is still rising and while some are saying the worst is over, the majority of consumers surveyed … don’t feel that way. Until they do, consumers are unlikely to start spending again.”
U.S.-based employers announced fewer plans to slash jobs for the second month in a row in March, according to outplacement firm Challenger, Gray & Christmas Inc.
In a new report, Challenger said employers announced 150,411 cuts in March, down 19.3 percent from the 186,350 cuts announced in February. Plans to reduce staff were down in February too, which means we have seen the first two-month decrease in cuts since February-March 2007.
The March cuts were the lowest since October, when 112,884 planned job cuts were announced and come on the heels of a 23-percent decline recorded in February.
One of their top clients, department store operator Macy’s Inc, announced a sweeping measure to consolidate its divisions into a single unit and slash about 7,000 jobs in an effort to cut costs.
A mere three days later, Estee and Arden both posted sharp declines in quarterly profits, and also announced job cuts. While Estee, known for the Clinique and Bobbi Brown brands, said it would shed about 2,000 jobs, Arden did not specify a number.
Check out the not-so-chipper news in the retail world.
Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.
Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.
Late on Tuesday, Target said it would cut jobs, mainly at its headquarters in Minneapolis, while Best Buy (also headquartered in Minneapolis) said it planned involuntary layoffs after too few employees took voluntary exit packages.
Not belt tightening by retail customers (if there are any left), but the latest round of cost cuts by retailers themselves.
Williams-Sonoma is cutting 18 percent of its workforce and also paired back capital spending.
Metro AG, Germany’s top listed retailer, plans to cut 15,000 jobs or about 5 percent of its global workforce by 2012 amid a broader restructuring program, a source close to the company told Reuters on Tuesday. The company, which owns supermarkets and department stores, employs about 300,000 people in 2,200 stores across 32 countries.
Check out how consumers feel about shopping at malls.
Auto dealers and reporters are popular targets for hate mail. But mall operators may have reason to fear joining them if a new study conducted by the University of Pennsylvania Wharton School and the Verde Group, a market research consultancy, is to be believed.
Almost eight of every 10 people surveyed faced a problem at the mall, citing such issues as a limited choice of places to eat, lack of variety of stores, parking difficulties and a shortage of restrooms.
Check out the disappearing jobs.
Job cuts in November soared to their highest monthly level since 1992, according to outplacement consultancy Challenger, Gray & Christmas.
A total of 181,671 job cuts were announced in the month, 61 percent more than in October, the firm said.
Employers have now announced 1,057,645 job cuts in 2008, just shy of the 1,072,054 layoffs announced in 2005, which was the last time that annual job cuts surpassed 1 million, Challenger said.
The financial sector was the biggest culprit, led by Citigroup’s plan to cut more than 50,000 jobs.
But job cuts are happening all over and retail lost another 11,000 jobs last month.
Things are also likely to get worse in the job market. December is typically one of the larger job-cutting months of the year, CEO John Challenger noted.
Also in the basket:
Crocs and Skechers settle patent suit
US retail tracker slashes holiday forecast
Shalom, Christmas Shoppers: Israelis Sell Cosmetics, Toys at the Mall (WSJ)