Check out people buying only what they use.
 
Remember when every time you went to the store you bought toilet paper, paper towels and other basics just so that you wouldn’t run out?
 
Well, those days appear to be gone.
 
As companies like Colgate-Palmolive and Procter & Gamble report earnings, one thing becoming clear is that consumers are now using up everything they have in their cupboards before buying replacements.
 
Call it “destocking,” “pantry deloading,” or “inventory drawdowns,” but whatever it’s called, it cuts into sales — for retailers and manufacturers. As consumers are using up the shampoo or soup they have on their shelves before buying more, retailers are also getting rid of excess inventory before buying more from manufacturers.
 
With the economy in recession, consumers have every reason to be frugal. On top of that, manufacturers have raised prices over the past two years in order to cope with soaring commodity costs.
 
But with fewer items being purchased, the next question is whether those manufacturers will have to lower prices to maintain market share.
 
Also in the basket:
 
GDP sees biggest drop in 27 years
 
Unilever faces slowdown just as new CEO takes over
 
 (Photo: Reuters)

Check out the National Retail Federation’s sales outlook.
 
Even the retail industry’s trade group is expecting sales to fall 0.5 this year. The NRF, known for its optimistic sales forecasts, is expecting the first decline since it began tracking sales in 1995.
 
Oh, and things could even get worse.
 
If the government does not quickly pass an economic stimulus package, “then all bets are off,” NRF Chief Economist Rosalind Wells told Reuters.
 
With the U.S. in the throws of a recession, preliminary figures showed that retail sales rose 1.4 percent in 2008, well below the 3.5 percent increase the NRF originally forecast. 
 
The year culminated with the worst holiday season in four decades or more, according to some analysts.
 
Retailer bankruptcies, job cuts and store closings have continued into 2009, and the NRF forecast is the latest sign that things are not expected to get better any time soon.
 
Also in the basket:
 
Hershey profit beats estimates, sticks by 2009 view
 
UK retailers predict worst February on record - CBI
 
Hartmarx seeks to stay whole (WWD, subscription required)

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:

National Retail Federation:

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: 

ShopperTrak RCT’s National Retail Sales Estimate found sales on Black Friday and Saturday rose 1.9 percent from 2007 – with each day posting total sales of $10.6 billion and $6.0 billion, respectively.

It said Saturday sales fell 0.8 percent compared with last year as most Black Friday promotions ended.  Sales on Saturday last year rose 5.4 percent over 2006, with $6.1 billion spent that day.   

“At this point, we anticipate sales levels will continue to slow this week as consumers will remain home, looking for additional holiday sales toward the end of the shortened 2008 season,” said Bill Martin, co-founder of ShopperTrak, in a statement on Monday.

ShopperTrak’s results are derived from statistics from the Commerce Department on sales of items like apparel, furniture, and electronics, combined with data it tracks on shopper traffic in stores.

SpendingPulse:

On Monday, SpendingPulse, a data service provided by MasterCard Advisors, said sales at U.S. specialty apparel retailers rose 1.6 percent on Friday and Saturday from a year earlier, but sales at electronics specialty retailers fell 14.3 percent. Luxury retailers saw a 2.4 percent increase,  while e-commerce sales rose 11.8 percent, it said. 

“We definitely think there was some pent-up demand that came to the front lines on Black Friday,” said SpendingPulse’s Michael McNamara. “Major discounting obviously attracted that.” 

SpendingPulse is a macroeconomic indicator that estimates U.S. retail sales across all payment forms, including cash and checks.

Data to come:

Dec. 3: SpendingPulse will release its full report on November monthly sales.

Dec. 3: ShopperTrak will release its complete report for Friday, Saturday and Sunday, in addition to sales and traffic data for the week ending Nov. 29.

Dec. 4: Major retail chains, like Wal-Mart, Gap and Kohl’s, will release their November monthly sales figures and are expected to comment on the Black Friday weekend.

(Photo\Reuters)

While most of the United States is singing the holiday blues, here are some views from laid-back Los Angeles, where recession humor is starting to take hold. Photos are mine:

And when the economy gives you empty shopping carts, make art…

Check Out the tough love consumers are doling out to retailers.

Not only are they thinking twice about shopping, consumers are also losing faith in gift cards, according to the America’s Research Group/UBS 2008 Christmas survey.

While such cards were among the top gifts for holiday 2007, consumers this year are worried that stores could slip into bankruptcy and leave gift card recipients out in the cold.

Of consumers who will not do their regular gift card buying this year, 64.4 percent said they will gift money instead.

And if you got a gift card last year, don’t be too sure you’re going to see a present coming your way this Christmas. More than a third of the people in the group mentioned above said it’s possible they will give nothing at all.

While 22.8 percent of Americans have already seen job cuts at their workplace, 31.8 percent expect the axe to drop in the future, according to the survey, which polled 1,000 adults aged 20 to 59.

And the thought of their debt load is not giving them a warm, fuzzy feeling either. More than half of those surveyed said they are feeling some pressure from their debt, while 21.8 percent said they felt it bearing down on them.

About 57.9 percent of those pressured by debt are going to spend less this Christmas due to credit concerns.

“Consumers have snapped shut their wallets this year and it’s difficult to find a bright spot for the Christmas shopping season,” said Britt Beemer, chairman of ARG.

But if you are a retailer and come out guns blazing with deep discounts, there is a chance you will snag some sales. Nearly 90 percent of surveyed shoppers said they are swayed at some level by discounts and sales, while 84 percent admitted they are more sales-driven now than three to five years ago.

Also in the basket:

PepsiCo stands by outlook, to outline 2009 plans

Debt protection costs on Macy’s, Limited surge

Wal-Mart in wind energy deal with Duke Energy

Kohl’s to offer wider price cuts for holidays

Barnes & Noble loss more than expected, shares fall

US weekly jobless claims surge to 16-year high

(Photo/Reuters)

U.S. retailers, some of them on the brink of complete ruin, are already slashing prices ahead of Black Friday next week. We’ll be covering the fallout of the financial crisis and how it is changing the consumer psyche in great detail, both here and on the Reuters Holiday Shopping coverage page. To start off, here are a few images of how “recession” is the new sexy when it comes to luring shoppers, from our reporters in the trenches.

New York City, where the sign says it all, via Nick Zieminski:

It almost looks like the Entire Store is for Free, though that is not the case:

These are from Atlantic City, if anyone is looking for diamonds, via Martinne Geller:

Or dress shirts (everything MUST go):

Plus a handbag, provided there is something to put inside:

Check out the falling same-store sales at Costco.
 
Okay, October was a pretty rancid month for most retailers, and most did worse than Costco.
 
But the warehouse club operator had a 1 pct same-store sales decline in October that was its worst performance since Thomson Reuters began tracking such data for Costco in 1997.
 
Warehouse clubs had been holding in with cash-strapped consumers looking to save money with bulk purchases of toilet paper, food and other essential items.
 
But consumers have really cut back on the nonessentials, so sales of items like computers, toys and jewelry suffered.
 
Wonder how the 1,000-count bottles of aspirin are selling as consumers cope with the economic headache.

Also in the basket:
 
Anheuser profit meets view; silent on deal
 
For Wal-Mart, a Christmas that’s made to order (N.Y. Times)
 
President Obama’s Era: Low-Key and Modern, From Society to Style (WWD, subscription required)

(Reuters photo)

Check out the same old sales story. 
 
Wal-Mart and other discounters: good. Saks and other high-priced retailers: bad.
 
The pattern seen over the past several months held again for August as cash-strapped consumers sought back-to-school bargains. 
 
Generally speaking, it’s bad form for little Johnny to show up for school naked and without notebooks and pens and pencils. So parents have to shop at least a little bit when school starts.
 
But as expected, they shopped where they could save money.
 
Back-to-school season can also set the trend for the key holiday shopping season. So the question becomes whether this will be a discount Christmas.
 
Employers are cutting back as much as they can, in order to be more profitable. That has led to a huge jump in productivity, but at the expense of jobs.
 
The August jobs report on Friday is expected to show that employers continued their job cutting in August.
 
Not a great sign for holiday cheer.
 
Also in the basket:
 
U.S. chicken industry still hurting - Sanderson farms
 
Polman a surprise pick to revive Unilever fortunes

Check out the strong sales at McDonald’s in the … United States?
 
The world’s biggest restaurant chain posted its largest monthly U.S. same-store sales gain since February, when Leap year added an extra selling day. Barring the Leap year, July was the best month in 11 months.
 
It seems like only a few months ago people were worried that cash-strapped U.S. consumers would start shunning restaurants altogether, even the less expensive ones like McDonald’s.
 
In fact, it was. The company posted a drop in U.S. same-store sales in March, the first such decline in five years.
 
But the U.S. rebounded and strength in U.S. sales in July is a sign that the company is benefiting as consumers trade down from casual-dining restaurants like Red Lobster and Applebee’s, and that the value message of McDonald’s is attracting customers, analysts said.
  
Growth in high-margin items like drinks could also help the company offset rising hamburger commodity prices, UBS restaurant analyst David Palmer said in a research note.
 
Also in the basket:
 
Hormel gives lower 3rd-qtr view; cuts ‘08 outlook
 
Rising grain costs hit consumers (Wall Street Journal, subscription required)

(Photo: Reuters)