Posted on 01/05/2011 8:21:56 AM PST by SeekAndFind
The just-concluded holiday retail season continues to look strong, at least in top-line numbers provided by Spending Pulse. Sales increased more in 2010 than any time in the last four years, a sign that consumers may have found a comfort level despite the burdens of high unemployment. The data also shows that shoppers began returning to higher-end retailers rather than concentrate on discounters:
Americans spent more on clothes, shoes, luxury goods and electronics in December than a year earlier, extending retail sales momentum that had been building since August, according to data released Wednesday.
Figures released by MasterCard Advisors’ SpendingPulse, which tracks spending in all forms including cash, show consumers treated themselves to new clothes and shoes while they shopped for gifts during the most important period of the year for retailers.
Jewelry sparkled, and online sales soared. Even home furnishings and furniture — pummeled by the housing market slump — eked out a small increase for the period from Nov. 28 through Saturday. Meanwhile, electronics sales, hurt by aggressive discounting of televisions, rose only slightly.
Analysts are forecasting that holiday sales — which usually produce about 40 percent of retailers’ annual profit — rose faster than in any year since 2006.
Profit, though, may still be the problem. The larger retailers will begin disclosing their sales and profit numbers this week, and the Commerce Department will have a report out a week from Thursday on the economic activity in retail. Heavy discounting will erode some of the power of the top-line sales numbers if it again took that to draw consumers into the stores.
The new data does show some indication that shoppers looked for higher-end products to a greater degree than in the last few years. Abercrombie & Fitch also operates the lower-priced Aeropostale and claims that shoppers returned to the A&F store this season. Saks and Macy’s are expected to show gains in stores open for more than a year; so is Target, but primarily for its discounting through its branded credit cards. Assuming that these show a trend in holiday shopping, bottom lines might be better than one might expect.
That’s still not true in electronics, however. The deep competition, probably most felt with online retailers, drove heavy discounts on almost-flat sales. That seems a little unusual, given the innovation and new products available, but most of those were higher-ticket items anyway — iPads, Xbox and the new Kinect systems, and the ubiquitous big-screen TVs, where the most aggressive discounting appears to have taken place. It may be that consumers purchased more but limited their buys to smaller-ticket items, which would produce a boost for clothing and perhaps jewelry on the lower end, but leave electronics and home furnishings to flat or incrementally improved sales, which is what Spending Pulse reported.
So far, the news looks good from the holiday retail season, although again, the final judgment relies on the bottom line, not the top line. At least consumers seem ready to return to the modestly-good levels of spending seen in 2007 for a few weeks, and if so, the major retailers should survive well for another year on the momentum.
I am hearing this is a load of BS without the inflation calculated into it. Basics are getting inflated quickly compared to last year it may look like more things were purchased, but it may be less with the inflation (The REAL Number) adjusted.
I doubt people went and did more this year.
Many American consumers have been programmed to consume from the constant bombardment of advertisements and media. I know many freepers say not true, but Madison Avenue spends tens of millions on behavior studies and it works. I have many friends whose wives know of the need to be frugal but got very antsy after belt tightening since the financial meltdown of 2008. It starts with a simple coupon from Kohl’s, then lure of “discounts” and before you know it they are back in the stores buying more “stuff”. Others do pay down their credit cards, but immediately are back to their old habits when they should be saving as they approach middle age and retirement age. Americans are back to their old habits when they should be retiring their debts and building up their savings and invest in hard assets in these still uncertain financial times. Fed printing may ignite inflation or cause the US dollar to lose its status as the world reserve currency. Despite the pickup in the economy, the huge debt has created this hanging sword over our heads. My family has taken this reprieve to continue to shore up our prepper supplies and survival necessities.
Zircon’s look real too.
Well I must confess my outlook turned a little brighter in early November of last year too.
Seriously.
And insofar as high end retailers -- the goods on their clearance racks frequently cost less than places like Target or Marshalls, and sometimes are several dozens of times the quality of the low-end discounters and will last for many YEARS, as opposed to a few seasons.
Will we ever see a sales breakdown? For instance, how many Americans FINALLY replaced an old worn out jacket or winter coat because they *had* to replace it???
We had the money to spend on the grandchildren, so did my daughter. When I asked her what to buy them she said clothes. We all bought them clothes. They did get the obligatory toy or two but they mostly got clothes.
Oh yeah, you are right about the high end clearances costing less. I bought all their stuff off the clearance racks at high end outlet stores, Neiman Marcus Last Call, Saks Off Fifth, Nordstroms Rack, Juicy Couture. I buy stuff cheaper at those places than I would pay for it at Walmart.
Certainly not the case in my area. You could have gone into any of these malls in December with a bucket of balls and a nine iron, and you wouldn’t have hit anybody.
That's a good point. Over the last couple of years the only "extravagant" thing we bought was an electric mattress warmer..only so we could turn the heat down in the house.
This year it was more blankets and winter hats (we even wear them inside). Global Warming is so bad it's even freezing in Florida.
I've even been going to the actual department stores, and checking the clearance racks, NOT the "sales" racks, but specifically clearance racks, and frequently have good luck.
And like you, I've grabbed some VERY high-end clothing at the brand-name-outlet stores, and really - as long as it's classic, who would ever know that it's not this year's OR last year's (lol) merchandise??
This year it was more blankets and winter hats (we even wear them inside)." <<<
There's a REASON that our great great great grandparents wore sleeping caps -- they relied on heat from the fireplace, and by morning the cinders weren't weren't emitting much heat. I've read that at least 70% of one's body heat is lost through the crown of one's head, so a cap is the fastest way to get warm.
Like you, we "splurged" when we found extremely expensive high-end brand name 50-below-zero winter gloves at a liquidators, and everyone found a pair of them under the tree this year.
Other "luxuries" are expensive winter underwear - I'm hoping stores will slash prices again this springtime on the really high quality versions.
I take people that shop at Target, etc shopping with me and they are like WOW. I wear nothing but high end stuff and pay less for it than they do at Target.
Some people think I spend a fortune on clothes but I don’t. I also shop ebay for some stuff. I recently got a $400 pr of Isabella Fiore mules for $25, a pr of Tommy Bahama slides for under $20 off ebay, and from Saks a $30 pr of Beverly Feldman sandals. Woohoo!
You just have to shop smart.
Some of my friends disagree with me about lots of Americans needing to replace essentials, like sweaters & winter coats & woolen socks --- and instead they insist that they believe that there is a certain percentage of the population who is simply "sick and tired" of the Recession --- and that these Americans charged up a VERY fine Christmas, indeed, on their now maxed-out credit cards.
Some of the less expensive stores have very creative new, YOUNG, designers -- but fashion is on the back burner, INDEFINITELY, lol!! :)
I expected to hear specific items after the advertisements, things like 'iPad' or 'Nook' or 'Google TV.'
You know.... bestselling items, right?
But when the segment recommenced, the best selling items were clothing and jewelry.
I think we understand the former, but I am really curious about the jewelry --- whether it represents very high end pieces laden with jewels and precious metals, or whether it represents less elaborate items, but still PURE gold or PURE silver -- inotherwords, a personal investment that one wears around the neck.
Did the jewelry part of the equation for great retail sails represent fine diamonds or 'fine' costume jewelry???
I hope we have a breakdown on this later in the year, and with that clothing, I'd love to know how great a percentage was winter coats, caps, mittens and underwear & socks.
LOL!
IF so, when would this be expected?
Last night they said that the best sellers were clothing and jewelry .... that together, jewelry and clothing represent MOST of the retail sales over the holidays.
I doubt you'll agree, but I'd like to know how many winter caps, hats, scarves and mittens, along with underwear & socks, and maybe coats & jackets constituted those "tremendous" retail sales.
Thank you.
I doubt it, too. No one I know threw a very big Christmas. We went to Walmart's Black Friday sale and the store barely had more customers than it normally does. Hubby and I agreed not to exchange gifts and we spent less than $100 for the rest of the family sticking to highly discounted but useful items. This was our least expensive Christmas of all time. I've heard others say the same about keeping the cost down and buying needed and useful gifts.
“Any of you happen to know if some time this year they will ever break down the actual numbers behind the retail sales this holiday season?”
Looks like next week we will know.
Remember The Pumping During The Holidays?
“Retailers are going to report the best results since 2006!”
Or something like that.
As merchants report their figures Thursday, many retailers including Target Corp., Costco Wholesale Corp. and Macy’s Inc. reported gains below Wall Street expectations. Bon-Ton Stores Inc.’s sales were virtually flat and company officials blamed the severe snowstorms.
Oops.
Of course it’s the snowstorms. It’s not that people are broke. There’s always an excuse, especially when companies like Target miss huge (up 0.9% .vs. expectations of +4%)
Target blamed “pulled forward” demand from November (huh) and in addition lower margins.
Oh really? Lower margins eh? Who’s been talking about that?
Here’s reality folks: There’s nothing to love here. Sure, there are places where results have been good, notably parts of Sillyfornia and Washington DC, home of the Federal Tit upon which all suckle.
But in the real world as I noted in some Facebook postings contemporary with the actual events, I saw little evidence of a holiday retail boom. To the contrary - what I saw was anemic demand at best. Stores with nobody in them, even in the “last minute” crush of alleged Christmas Eve. There was exactly one place that was quite busy, our local BigBox electronics place - but everyone in line had things that fit in one hand with them to buy. Of note was what wasn’t selling, not what was - bigscreen TVs and computers. When the average customer has a couple of DVDs and a 50% off camera in their hands you’re in trouble and when the local outdoor mall, despite near-perfect holiday weather (seriously - it was sweatshirt only required the entire week; no heavy coats required here) looks more like an artillery range in terms of human population you got problems.
Of course anecdotes don’t make for facts. They’re anecdotes, which is why you wait for the facts, which is what I’ve been counseling since Black Friday. If you bought the hypersterism in the RTH I hope you took your profits - the run was nice, but if these results bear out it’s also very “over.”
I maintain the position that I’ve had since the pump-fest began: I’m waiting for actual earnings results before I pass judgment, which we’re due to start getting next week.
I don’t think reality is going to live up to the hype.
At all.
Continue
http://market-ticker.org/akcs-www?post=176623
You know something else Hennie Pennie I heard children were asking for the items you mentioned instead of toys. Cotton BTW is expected to go sky high so I was actually at the mall today buying the marked down items to replenish the things I thought I should. I do agree with your assessment.
Thanks for the heads up on cotton, there are some items I'm interested in - it's best to get those cotton pillowcases this week, and not next year, LOL.
That's just fascinating that you kept an eye on Facebook. I must say that we not once, not once, ever went into a crowded store, with the exception of December 23rd, and that day, quite a few stores were very busy.... but NOTHING like the crushes that occurred back at the turn of this century.
We should conduct a poll here and find out how many freepers received essential clothing wrapped up as gifts for Christmas.
Children asking for clothes, who'd have thought that would ever happen again during our lifetimes?
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