Retailers, consumers and prices
Florsheim mens shoes are reasonably classy. They were imortalised, for example, by snappily dressed Jack Nicholson in Roman Polanski's "Chinatown". He was rather distressed, film buffs will recall, by what a flood drainage canal did to them.
So it was something of a sign of the times last week that a visitor to a normally genteel Florsheim shoe shop in a Maryland mall got the hard sell from two salesman. Simply popping in to ask a question, our hero was essentially told -- firmly -- that he could not afford to leave without purchasing some footwear. The price was right, he was told.
No shoes were purchased, as it happens, but the pitch was nonetheless enlightening as a sign of desperation. The mall was relatively empty, despite cut down sales at nearly every shop. Very few people were buying, judging by the shopping bags. Sales staff everywhere looked pretty lonely.
Purely subjectively, but there were no signs at this particular mall of a seasonal spurt to spending in the world's leading economy.
The National Bureau of Economic Research, a prestigious private institute that decides when the United States is in recession, says we’ve been in one since December last year.
The call from the NBER came as news to almost nobody in the United States, where unemployment is climbing, available credit is shrinking, consumer spending and confidence are lagging and home prices are falling off a cliff after a huge rise that enabled homeowners to use their property as a cash machine.
Both Kraft, the largest North American food maker and Kellogg, the world’s largest cereal company, posted third-quarter profits that topped Wall Street’s expectations thanks to price increases and new items. The results are yet another nod to the fact that while you may shun clothes, jewelry or furniture during crunch times, you still gotta eat.
But Chief Executive Irene Rosenfeld of Kraft, with brands from its namesake cheese and Maxwell House coffee to Oreo cookies and Toblerone chocolates, warned that tight credit conditions could cause some retailers to liquidate their inventories, which could affect product shipments in the fourth quarter.