I’m about to call B.S. on these same song-and-dance stories the media pulls out every year claiming “Sales are down this year!”.
I swear this is a charade reatiler’s PR/Marketing departments pull out of their ass every year to entice people into thinking prices are being slashed.
“Our sales are really hurting this season compared to last. We’re going to have to drastically reduce prices to get rid of all this stuff.”
Really???
How come I see this same stupid story every year?
If sales really go down every year does that mean the last time they had a good year was 1992 and they’ve been downhill ever since?
When was the last time you were at Costco or Best Buy this month? People were buying so much crap it looked like they were stockpiling for WWIII.
I’m not buying this “Shed a tear for the retailers this season” crap anymore.
The story does mix anecdotal and “official” information, and I can see why that would stir your suspicions. I don’t know what you’ve read in previous years; I certainly don’t remember stories like this from past years but I didn’t really pay attention. But I think the story is generally on target and sales are down this year.
Oh, well, if there were a lot of people shopping the last time you went to the store, the story must be baloney. These kinds of stories are often about sales relative to expectations. And relative to expectations, yes, I think the season has been disappointing. Not for Best Buy, though.
Are they down by sales goals? Generally, businesses want to do better this year than last year.
Or are they down compared to last year, or pacing?
So if a business sold $1 million last year, and their goal was $2 million this year, but they only sold $1.5 million, then they could be “down,” even though they did better than last year.
I know what the OP’s talking about. Every year since 2001 my un-scientific impression is that media has been trumpeting from the highest high the doom and gloom that we should all be feeling because “SALES ARE DOWN! RETAILERS NERVOUS! CAN THE CHILDREN BE SAVED?”
How’s this for a really mixed and confusing report from an actual financial source, Bloomberg, which should know better:
I think this is saying that the rate increase in sales in November was better than predicted and at a higher rate increase than any single month since 2002, but that the holiday season as a whole will be… .who knows exactly what they are saying in that bolded bit?
I work for Australia Post. Mail volumes are UP. This is the busiest Christmas I can remember for quite a few years (probably the busiest this century so far). People are mailing stuff they have bought. So yes it’s anecdotal, but my gut feel is that the retailers are doing ok. There are storm clouds on the economy’s horizon, but they haven’t yet hit at the consumer level, I don’t think. US sub prime is doing damage, but it’s still a bit of an unknown quantity.
A friend of mine works in a relatively upscale clothing store, and they’re having problems. Not just in terms of meeting their sales goals but also matching their sales from last year. Her experience is that people just aren’t buying as much this year. I think we should get all of our anecdotes together and have them fight it out in a thunderdome deathmatch. Chainsaws!
I think that the OP is onto something. ISTR complaints about how holiday seasons making/breaking retail businesses for years, and that the last several years had been mostly talking about “the current weak” holiday spending would doom lots of companies.
It’s only anecdotal, but I’m another who does think that this is a trick that’s been tried before.
Having said that, I wouldn’t be surprised to find out that this time it’s right - since AIUI holiday spending, more than any other, tends to follow economic confidence, and right now, economic confidence is taking a hit.
So, it’s the boy calling wolf, again. And maybe this time the little bugger is gonna get et.
And there’s a part of me that’s thinking of leaving Boss Sauce* out for the wolf.
*gotta do my bit to plug Rochester businesses…
The Times had an article about how women’s clothes were especially down, and speculated that women bought for themselves last, so a crunch would be felt there first. Luxury goods, however, were doing fine,
We’re basically not going to know until Christmas is over. A basically 3 day weekend right before is perfect for stores. But they are panicked. We were getting 20 - 30% discount coupons from Macy’s and Borders every bloody day. Discover had a program that gave you a $20 gift card for every $200 spent in the same mall. How they’re making money on that is beyond me.
Given that it’s highly likely that Black Friday being the day at which a business becomes profitable is total bullshit, I’m going to say the gloom and doom predictions for this holiday season are crap too. I live a couple blocks away from the local Wal-Martisqatsi, and I can tell you that the parking lot of the place is as jammed as it usually is this time of year.
Maybe people are waiting later than usual to do their shopping? I was in Wally World Thursday after midnight and there were several people with two baskets each loaded down with toys and other gifty items.
Damnitall, it’s supposed to be dead in there after midnight…
Yeah, that’s key. Black Friday was long enough ago that a lot of companies have reported their results from that time, and I certainly saw some companies that had to offer bigger than expected discounts and got smaller profits as a result. I don’t know the figures, but I’ve seen a lot of commentary about various businesses taking a hit because people don’t seem to be spending as much this season.
Who does your company mail to, and what do they send? Sales of every single thing aren’t down, obvously. But, for example, it’s widely believed that higher-end stuff is being hurt as people trade down to cheaper products whenever they can.
What’s unknown at this point is how far it’s going to go. It’s really nailed some major banks - I wouldn’t expect you to be up on this in Australia, but some major US financial institutions have fired their CEOs over what’s happened. They’ve written down tens of billions of dollars in loans that they’ll never get back, and more of that is coming. A few companies reported quarterly losses for the first time ever. What started with subprime housing is now hurting all kinds of credit.
Well, I think you’re reading a bit much in to the phrase; it obviously refers to financial confidence, not personal. It doesn’t even imply that low consumer confidence is anything but a rational response to external economic circumstances, so there’s not even an implicit value judgment there.
I suspect you know this, of course, it just seems like a weird thing to be annoyed by. There is undoubtedly some factor in people’s decision-making processes that dictates how likely they are to want to either increase their debt or hold on to their cash. I can’t really think of a better way to describe it than “consumer confidence”. “Short term capital affinity” doesn’t exactly trip off the tongue…
Of course, I’m only replying here because I haven’t finished my Christmas shopping, and am seeking any excuse to delay heading outside where I am fairly confident I will end up mutilating a fellow consumer within 30 seconds. Ah, the holiday spirit.
Well, I have kind of a different take on it; the subprime mess is a bit like a shop owner ordering and keeping too much inventory. Once the homeowners who bought into these stupid, stupid loans begin to default on them, the assets of a lender change from cash to property, which in many cases is over-valued, but a simple (and I say simple knowing how difficult it is) accrual-based analysis of the financials of a company will tell you what they REALLY have. Granted, cash is king, but the picture for everybody CAN be a lot rosier with ALL of the information, I mean, it’s not like the houses just disappear when a client defaults on a loan, so the losses, while still significant, aren’t complete, and the final analysis is FAR from over.
As far as the OP? I agree. When you “expect” something to happen and it doesn’t, and you base your margins on this ‘expectation’ you get what you have coming.
These kinds of stories are often about sales relative to expectations. And relative to expectations, yes, I think the season has been disappointing. Not for Best Buy, though.