Posts filed under “Retail”
A quick note on the start of the holiday shopping season. Three elements are apparent:
1) Data shows a (slightly) softer start to the season;
2) Discounting is everywhere;
3) Credit Card usage is up significantly.
This has not started out significantly better than last year. Indeed, according to ShopperTrak, sales for Black Friday actually fell 0.9 percent over last year, to $8.01 billion. At the same time, Visa reported that credit card use had surged 13.9 percent.
Was the drop due to increased discounting so early? Or, do consumers simply have that much less cash in their pockets — due primarily to higher energy prices and reduced cash out refis? Perhaps a combination of facotrs explains this.
Of course, a single data point does not make a trend. There is still plenty of time for Retailers to recover, and this may end up a decent season. But so far, initial data is not exactly encouraging that we will see a robust shopping season.
The bottom line is early discounting, weaker shopping and increased reliance on credit cannot be spun positively. Perhaps my more recent optimism — still on the low side for most of Wall Street — was misplaced. My earlier expectations that the consumer is nearly shopped out seems to be very much coming to fruition.
Behind Early Shopping Frenzy: Big Deals, Worries About Season
ANN ZIMMERMAN, AMY MERRICK and ELLEN BYRON
THE WALL STREET JOURNAL, November 26, 2005; Page A1
Initial Reports Are Mixed for Retail’s Busiest Day
NYT, November 27, 2005