"Chain store sales finished the “first phase” of the holiday shopping season (the pre-Christmas Day part) with a very mixed performance. There were pockets of strength, pockets of weakness, shifts in where spending occurred (online/in-store), shifts in the shares of spending on gift certificates/merchandise, a heavily discounted season (though largely planned), late consumer shopping, warm weather bouts paring seasonal demand and calendar issues affecting perceptions of strength."
Bill King notes "this amounts to an sales increase (pre-Christmas ) of just 1.7% y/y. This is far less than the 22.5% espoused by ShopperTrak."
"Although there is still one more week left in the December reporting period, comp-store sales for the five-week fiscal month of December—which will be reported on January 4, 2007—appear on-track for the low-end of our monthly range (2.5-3.5%) and as a result on the low-end of our range (2.5-3.0%) for the two-month November-December season . . .
Chain store sales rose by 2.5% in November, based on ICSC’s tally of 59 retail chains, and are expected to grow by about the same pace in December."
The one bright spot remains gift cards/post holiday shopping:
"With nearly one-in-five (18%) consumers who said they planned to shop on the day after Christmas (which was not significantly different from the 19% reporting that they shopped on December 26, 2005 when it was a federal holiday), the last week of the fiscal month might exceed modest expectations as consumers redeem those holiday gift cards and shop for the bargains on clearance."
YMMV . . .
Latest Week’s Sales Snapshot ICSC-UBS Weekly
International Council of Shopping Centers,
ICSC, December 27, 2006, 7:45 AM (ET)
Some of the recent Housing data has been “encouraging:” • Sales for existing homes rose in November for the second straight month; • New single-family homes rose 3.4% in November (seasonally adjusted), following a 3.8 percent decline in October; • Inventory backlog declined to a 6.3-month supply in November (from 6.7-months); • The 4 week…Read More
Once more unto the breach, dear friends, once more;
Back in the studio tonite, at 5:30 – 6pm. The topics will include THIS, as well as the market rally, Holiday Retail Sales activity, New Housing data, and of course, other more amusing economic data.
Guests include the forthright John Rutledge, and Art Laffer and Jim Huguet (author of Great Companies, Great Returns).
UPDATE: December 27, 2006 7:20pm
A classic example of "leaving it in the locker room." No only did I only get in two wishy washy sentences, but the best stuff came during the commercial breaks between segments.
We went over the long and short sectors, individual names, and nothing made it on the air.
Best line: the day I throw in the towel and flip Bullish, is the day you want to shor tthis market to all hell.
Better luck next year
A few random thoughts about these items:
1) Its the last week of the year, volume is thin, and mutual fund are having some fun.
2) November’s new sales numbers are encouraging, but recall just how subject to revision this data is:
The Census Bureau counts a house as sold when the contract is signed. If a buyer cancels the contract, however, Census does not readjust the numbers. Thus, sales are overstated — and inventories understated — for the month the house is initially sold. (And when that house is sold, the reverse happens).
Note that the homebuilders have been reporting cancellations in the 30%+ area — you can see why these initial numbers are suspect.
3) The sharp 15.6% drop in mortgage applications reported by the Mortgage Bankers Association for purchase loan applications confirm implies that new Home Sales may be overstated. Wait for the revised New Home data.
4) Lastly, the following email comes to us via a Lennar sales person — note that these homes are being sold, with add-ons, at greatly reduced prices, and in some cases, at a loss (click for email)
Given our focus today on Retail sales this week, it is appropriate to reference another source of data on the consumer.
This commentary comes to us via Northern Trust’s Paul Kasriel. Paul is the Senior Vice President and Director of Economic
Research at NT, and I had the pleasure of meeting him (and Caroline Baum) at Bloomberg last month. He is the recipient of the 2006 Lawrence R. Klein Award for Blue
Chip Forecasting Accuracy.
His recent commentary focused on the Fed’s Flow-of-Funds data. It is rather insightful work into consumer debt and savings. Some of it might be a bit beyond the interest of many readers, so to make it more accessible, I did a little slicing and dicing. Here is my highly edited version, emphasizing The State of Consumer, by the Numbers:
Kasriel: I love the Fed’s quarterly flow-of-funds report. It usually is the mother lode
of enlightening economic nuggets of information. And the Fed’s latest release on
December 7 of third-quarter data was rich with these nuggets.
The slowdown in
borrowing was due principally to the household sector: Chart 2 shows that after
hitting a post-WWII high of 14.6% in Q3:2005, household borrowing relative to
disposable personal income (DPI) dropped to 8.8% in Q3:2006 – the lowest since
7.6% in Q3:2001, when the economy was in a recession.
Notice in Chart 2 that
precipitous declines in this percentage tend to be followed by the onset of
economic recessions (indicated by the shaded areas in the chart).