Friday, December 11, 2009

Retail Sales Increase due to higher gas PRICES AGAIN

The retail sales data for November was slightly better than expected - up 1.3% in November but remember the data is not adjusted for inflation so higher gas prices (up 3.5% for the month) had a meaningful impact on the data. Excluding gas and autos, retail sales were up a more modest 0.6% in November.

More important may be the feedback retailers are providing on December sales. Things seem to be trailing optimistic expectations. From the WSJ...

"The first week of December, typically a lackluster time in the wake of Black Friday, was particularly slow. Sales for the week ended Dec. 5 fell 18% from the prior-week period, which included Black Friday, according to market researcher ShopperTrak RCT Corp. Last year, when the recession was in full force, sales fell a lesser 14%, according to the firm, which compiles shopping traffic at malls and uses sales statistics, as well as Commerce Department figures, for its estimate.

"After solid traffic the first couple of days, it looks like the middle of August out there," said Stephen Baker, vice president of industry analysis for retail watcher NPD Group.

So, in the midst of the great recession last year sales dipped 14% from Thanksgiving week until the first week of December. This year as things are improving sales fell 18%!! Consumers are holding out for big, deep discounts and they may get them sooner rather than later (locally, many retailers have cut prices 25% on seasonal gifts already. That could jump to 50% by next week).


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