U.S. store visits plummeted 21 percent and retail sales dropped 3.1 percent in the week through Saturday, signaling a lackluster finish for stores' most important selling season, Chicago-based researcher ShopperTrak said yesterday.Now Martin is still thinking we'll have 2.4% growth for the entire season, since sales were up before last week, and a lot of online shopping can also include gift cards that don't show up in sales till they're redeemed. But the same article notes that Target lost customers last week after their security breach made the news (even with Target scrambling to take 10% off everything as a "We're sorry" measure), and that department stores and teen apparel stores are both expecting declines in sales for this season.
Falling store traffic in recent weeks and uneven demand, especially for apparel, spurred chains to risk earnings by piling on the discounts to generate sales. Retailers including Neiman Marcus Group LLC were offering as much as 75 percent off, and some, including Macy's and Kohl's Corp. (KSS), were keeping stores open around the clock starting Friday. At the same time, Americans are increasingly shopping online.
"The numbers are a bit scaring," Bill Martin, ShopperTrak's co-founder, said in an interview. "This is modest growth."
With this in mind, I wonder if we might start seeing some serious vacancies and closings in brick-and-mortar stores over the next few months as the 4th Quarter figures roll in. I do believe the concept of large malls and big-box stores are things that are falling out of favor, particularly with people under 40 that grew up with the nightmare of those places being uncomfortably jammed and obnoxious. We'd rather buy things at our own pace at home. Now, many of these potentially lost retail jobs simply slip into other areas or into the new Amazon.com warehouses that are springing up everywhere, but it might not look so nice if you see a lot of empty spaces come this Spring.
Another item to keep your eye on is if our new housing bubble might be deflating. Numbers from the National Association of Realtors indicated that previously-owned home sales have been slowing down in recent months, possibly due to the reality of higher interest rates. The same phenomenom is happening in Wisconsin, where the Wisconsin Relators' Association said home sales were down 6% compared to November 2012. Now if you look inside those Wisconsin home sales numbers, they still look pretty good, with sales up 11.1% for the year and prices up 7.5%. But it also has been a long slog back from the decline in sales and home values that occurred between 2007 and 2011, and with the recent increases in unemployment claims and brutal December weather in much of the state, we need to keep our eyes peeled to see if the upward trend reverses in the coming months.
I still think we're more likely to continue growing than to decline in early 2014, but I also find a lot of the recent economic optimism on Wall Street and in the DC media to be a little premature. Better to stay level-headed than be suckered again by another bubble.
Our house has lost 50% of the increase in value it had since we bought it in 1990.
ReplyDeleteThe construction industry has not even begun to make up for the lost jobs since 2008. It's merely stopped the losses.
There are signs of some recovery, but that's all they are, signs. Like in March, when the melting snow reveals all the dead grass, but nothing has started to grow yet.