Retailers – A Bleak Season

Recent reports highlight the drop in retail sales across many sectors. Now that surveys are coming out that provide hard data on sales rather than simply projections from foot traffic, the picture is getting bleak. Resembling the recent blizzards sweeping across a good portion of the U.S, an unpleasant freeze has settled in place at the storefronts. U.S. retailers may see the worst sales growth this holiday season since 2002.

The MasterCard sales information demonstrates that focal niches have suffered drops in sales. The widely-watched women’s apparel segment endured a 6% drop in sales during the first half of the holiday shopping season. Most other brick and mortar retailing segments have not demonstrated strength either. Leading the pack were electronics, up 5.8% and luxury items, up 10.8%.

While online sales have surged 18% to $22.7 billion, this increase is a record low. Many online retailers have expressed disappointment about holiday sales.

A mere few days are left as retailers scramble to drop prices hoping to provide shoppers with an incentive to increase their purchases. Some view that this final week will serve as a desperate bid to salvage the holiday season; only time will tell if the merchants pull it off.

Overall it is difficult to find any promising stocks in the retail sector when taking in account fading consumer confidence, increasing credit card defaults, tightened lending, and sputtering holiday sales.

Retailers Face an Ominous Holiday Sign
http://www.nytimes.com/2007/12/17/business/17retail.html?_r=2&ref=business&oref=slogin&oref=slogin

Online sales disappointing
http://www.latimes.com/business/la-fi-internet17dec17,1,1730435.story?coll=la-headlines-business&ctrack=2&cset=true

See the earlier HingeFire post about retail sales:
Can Retail Sales hold up in December
http://hingefire.blogspot.com/2007/12/can-retail-sales-hold-up-in-december.html