Retailers needed to be promotional because of the energy story. We didn't really see any strengthening this season, but we didn't really see any weakening either. |
Sales are going the way they did in the last two years, which was after Thanksgiving, things settled down. But we also see, I think, the power of weather on these numbers. |
Sales were very stagnant during the month of May due to various factors, ranging from record-high gasoline prices to the Memorial Day weekend shift. |
Shoppers seemingly avoided malls due to perceived security concerns about being there on Halloween, |
Shoppers seemingly avoided malls due to perceived security concerns about being there on Halloween. |
So far it's been the lower-income consumers trimming their discretionary spending, ... However, a recent survey we did indicated that the gas and energy cost concerns may be moving up the income strata. That's something to watch out for. |
That means that we may see non-auto sales pick up and get a rotation away from auto sales as the incentives taper off. |
That was the dominant story in May. But you have to put the numbers in context, especially with April having been so strong. |
The arithmetic works in their favor. Looking at year-over-year comparisons, March last year was among the weakest months where retail sales also suffered because of a late Easter. |
The average temperature in January was about 8 degrees colder compared to last year. Cold weather doesn't interfere with shopping. It's the bad weather, with the snow and ice that cuts traffic. |
The big talk about value we haven't heard in 10 years since the last recession, but it comes back, and that's where we are now. Will department stores pick up again? Sure, but it will require the economy to first turn around. |
The big weekend sales at Penney, Kohl's and Sears does indicate that retailers want to get a jump on the season, |
The bottom line is, the [holiday sales] performance is likely to be the weakest on record. |
The bottom line today is that the economy is improving and the consumer is much more confident, ... This storm undoubtedly will hurt sales, especially on Saturday, but it could also trigger a different response where it shifts demand to other channels such as the Internet, catalogs and to gift cards. |
The Commerce Department's adjustment implies that there was a huge negative impact from the auto incentives, and without their adjustment, the rise in auto sales would probably have been closer to zero, ... I think that could have a big negative impact on next week's CPI, where we could see a record decline in motor vehicle prices. This in turn could set us up for a very low CPI or even a decline. |