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Blame it on the Locusts

Posted By Barry Ritholtz On May 25, 2004 @ 12:31 pm In Finance | Comments Disabled

A quick note on retail sales:

Just for once, JUST ONCE, I’d like to see a mediocre retail report released without some absurd excuse explaining disappointing sales.

Today’s softer than expected same store sales numbers were rationalized by (brace yourself) the outsized opening of Shrek 2 [1]. This despite the fact that retail sales have been softening for the past 2 weeks, and Shrek 2 [2] only opened Thurday evening. What about the prior 10 days?

In the winter, weak sales are blamed on the totally unexpected January phenomena of snow. In the Summer, its movies. Can’t these guys ever just say “Sales were lower than we’d hoped? Oops, our bad. We’ll try harder next month.”

Why is it always some external factor, and never anything the company did? Could it be their product mix is less robust than hoped for? (Never!) Have consumers gotten bored with their wares (Impossible!). Perhaps the new incentive program for our sales people isn’t working. Maybe the staff just got lazy. (well, maybe — just don’t blame management!).

As long as we’re coming up with lame excuses, why not locusts? What about the Cicadas [3]? As one web site [3] jokingly alleges, “Cicadas are vicious killers that prey on innocent children and pets, seething with deadly venom and flesh-eating bacteria. This year Cicadas will kill more people than snakes, spiders, scorpions, and sharks combined”

Yeah, that’s the ticket: Cicadas. People are afraid to leave their houses to go shopping due to the killer Cicadas . . .

UPDATE: May 25, 2004: 3:30pm
I’ve been thinking about why the “International Council of Shopping Centers” decided to blame soft sales on Shrek 2 — instead of the real culprit, like $2.59/gallon gasoline.

Then it dawned on me — If the ICSC did that, the actual economic conclusions might scare the beejesus out of them. With 2/3rds of the economy based on consumer spending, every additional dollar spent on gas is another buck not spent at the mall. Having just tanked up my wife’s fuel efficient, 4 cyclinder, 5 speed manual — it cost over $28 — I did a little math. $8 more than usual, 4-6 tank fulls a month (More if we go away on the weekends) and that’s about $50 less to spend on discretionary items.

Now mulitiply that times two if you have a big ugly SUV. (If you have a Hummer, than its times 4). If, like most suburban families, you have a second car, than multiply times two again.

Assuming yours is not a 2 Hummer family, than you are spending anywhere from $150 – $250 more per month on gasoline. THAT’S why retail numbers are a bit soft . . .

Had the ICSC released that statement, they would scare the hell out of holders of retail stocks — and clearly, this organization is much more worried about spin than truth . . .

Summer movies sap U.S. chain store sales – report [1]
Reuters, 05.25.04, 7:44 AM ET


Retail Snow Job [4]


Stores: Shrek ate our sales [5]
May 25, 2004: 12:41 PM EDT


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/05/blame-it-on-the-locusts/

URLs in this post:

[1] outsized opening of Shrek 2: http://www.forbes.com/business/services/newswire/2004/05/25/rtr1383446.html

[2] Shrek 2: http://www.imdb.com/title/tt0298148/

[3] Cicadas: http://www.cicadaville.com/

[4] Retail Snow Job: http://bigpicture.typepad.com/comments/2003/12/barrons_picks_u.html

[5] Stores: Shrek ate our sales: http://money.cnn.com/2004/05/25/news/economy/weeklysales/index.htm

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