Retail sales aresucking wind.
Retail sales managed a small increase in October as consumers struggled with a steep slump in housing, tighter credit conditions and soaring energy costs.
The Commerce Department reported Wednesday that retail sales edged up 0.2 percent in October compared to the previous month. It was the weakest showing since a 0.1 percent rise in August and represented a significant slowdown from a 0.7 percent jump in September sales.
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The weakness in retail sales last month reflected a 0.5 percent drop in sales at department stores, where merchants were hurt by a wamer-than-normal October which depressed sales of winter clothing.
Retailers are facing bleak prospects for Christmas with consumer confidence plunging in the face of soaring gasoline prices, slumping home sales and tougher lending standards being imposed by financial institutions in the wake of a serious credit crunch.
Analysts attributed much of the small October gain in retail sales to higher prices for gasoline and food rather than an actual increase in demand.
Ian Shepherdson, chief U.S. analyst at High Frequency Economics, said core retail sales have risen over the past three months at the slowest annualized rate in five years, since the time the country was struggling to emerge from the last recession. He predicted this weakness would intensify.
“We expect a further deterioration as consumers cut back in the face of soaring gas prices, falling stock prices and the continued disaster in housing,” Shepherdson said. “The holiday season will be terrible.”
Is the poor outlook part of the reason that the retailers have already been blasting inane tapes of “We Wish You a Merry Christmas?” for several weeks now? Is this some attempt to bump up their sales?
Frankly, I wonder if that tactic is likely to backfire as playing Christmas music starting in April is likely to dilute the meaning of Christmas (or at least any meaning that is left).
[O’Reilley take note: I’m referring to a local Walmart. They don’t have a war on Christmas – they like money. AND When I was growing up, I lived in a large Southern City where the largest department store was owned and named after a Jewish family (who by the way, was known for being rather devout). They had the biggest tree and all the kids wanted to ride the suspended cars that went around the tree – decorated to look like a pink pig.]
we get a lot of catalogues. lots of free shipping offers. and then my aunt who shops from QVC reports they are giving extra special offers this year. a first.