No one in his or her right mind would have expected November to be a good month for retail sales. Consumers are too worried about their jobs and most have maxed-out credit cards. But, bad is bad and worse is worse.
MasterCard (NYSE: MA) Advisors issued its report on retail sales for the first two weeks in November. Granted, that does not include the Black Friday weekend, but it is still a critical piece of data given the breadth of MasterCard use in stores and shops.
According to Reuters, MasterCard reported that overall apparel sales were down 19%. Electronics and appliance sales dropped a steep 22.1%. The numbers did have a slight improvement in the second week of the month over the first.
What can anyone say? The data about retailing is so relentlessly bad that predicting it will get worse is simply parroting a widely held opinion.
There is another way to look at the data, though. If sales were down so sharply in the first half of last month, retailers may well have turned to extremely sharp discounting to bring customers in for the balance of the holiday season. There is evidence that Black Friday sales were somewhat better than expected and that online sales are doing relatively well.
The bright side of analyzing the data is that, in desperation, retailers may have brought down prices enough to get people back into stores.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-11-2008 @ 11:04AM
Dan Barnett said...
But does it really help if the discount levels are so great that there is no profit? If the company can't replace its' inventory AND make enough profit to cover expenses, then I don't care how great the sales figures are, they ain't making money.
12-12-2008 @ 3:11PM
Paul Walsh said...
Key for November was in anticipating that retail sales results that would be less bad than the dismal expectations.
Three things that I believe contributed to the “less bad” than expected results:
1) gas price dividend "stimulus"
2) sustained cold weather across the eastern US driving need purchases of seasonal apparel (deferred purchases from October)
3) huge discounts.
Simple economics: cold weather driving need, “found money” from gas price decline, cheap stuff.
Problem for December: 2 of the 3 positives (gas prices and weather) no longer providing a tail wind. Watch out for more disappointment in December.
P. Walsh
G2 Weather Intelligence
www.G2Weather.com