Thursday, April 9, 2009
Big retailers see big decline in March sales
The New York Times reports that the nation's big retailers had a worse March sales month than in February.
While one analyst said the numbers show it will be another six months before the nation settles into recovery, I believe the statistics show exactly the opposite.
And after Americans learn that they can live with all that extra spending of the past two decades, they are not going to return to their old spending ways. They are going to build up savings and emergency funds so they are not caught short again.
The shock and disbelief across this nation in its households is not going to dissipate for a very long time. America's buying habits will be forever changed, and so will the industries that have depended on excessive spending.
The Times reports:
Flowered dresses and linen jackets may be hitting store shelves, but it is not yet springtime for American retailers.
Major chains on Thursday reported March sales results that were worse than their February figures, though the rate of economic deceleration that plagued stores during the holidays has slowed a bit
The good news for March, retail analysts said, is that not every retailer was in free fall — which is what appeared to be the case during the holiday shopping season. Still, the word of the day is “caution.”
The prospect of a recovery, analysts at Standard & Poor’s Ratings Services said, is being hindered by the rise in the average duration of unemployment and in the number of people working part time for economic reasons.
“I think we’re six-plus months away from settling into recovery,” said Matthew F. Katz, a managing director in the retailing practice of AlixPartners, a reorganization firm. “We still have to flush out everything that happened to us, and we’re just not there yet.”
Industry analysts estimated that for the overall retail industry, March sales will be down 0.4 to 1 percent compared with the period a year ago.
The biggest drop came from Abercrombie & Fitch, which posted a stunning 34 percent March sales decline compared with last year. Sales at Wal-Mart Stores, the nation’s largest retailer, were up 1.4 percent (not including fuel).