December 26, 2003

Retail Sales

The Financial Times's Neil Buckley reports a disappointing Christmas for U.S. retailers:

FT.com Home US: US retailers are relying on a post-Christmas surge to hit their holiday sales targets after the pre-Christmas period fell short of expectations. Forecasters and retailers had looked forward to a sharp rebound this year, fuelled by a recovering economy, after a holiday season last year that was by some measures the worst for 30 years.

But while higher-income shoppers have opened their wallets, bolstering upmarket retailers' sales, lower-income shoppers have remained cautious. Another factor skewing the results has been rapid growth in gift cards and certificates, estimated to account for 8-10 per cent of holiday sales this year. Retailers book revenues from these when they are redeemed by their recipients, not when they are first sold. Wal-Mart, the world's biggest retailer, said on Friday that a rush in the days before Christmas had not been enough to lift monthly same-store sales growth, from stores open at least a year, above the low end of its 3-5 per cent forecast...

Posted by DeLong at December 26, 2003 01:48 PM | TrackBack

Comments

Providing some confirmation of Kurt Barnad's contention that "higher-income shoppers had spent more freely since rising stock markets had boosted the value of their share portfolios."

From Faux News:

Friday, December 26, 2003

NEW YORK High-end gadget seller Sharper Image Corp. (SHRP), Friday said same-store sales were up 21 percent so far in December, boosted by strong performance across the board, and raised its profit forecast.

The San Francisco-based retailer's stock rose 8 percent on Friday, coming very close to an all-time high in its 26 years of existence, as the company spent the past 18 months introducing cheaper products to expand its target demographic.

"Our typical customer used to be a baby-booming male, with a household income of $150,000 or more," Chief Financial Officer Jeff Forgan told Reuters in an interview.

Sharper Image, usually associated with tech-savvy and expensive products such as the $4000 deluxe get-a-way massage chair and robotic vacuum cleaners, this year introduced items such as automatic eyeglass cleaners and battery-operated nose-hair trimmers for under $50, attracting a different type of consumer.

"Our average consumer now is female, not male, and the average household income now ranges between $50,000 and $100,000," said Forgan.

http://www.foxnews.com/printer_friendly_story/0,3566,106751,00.html

Can anyone say: "Let them eat cake?"

Posted by: Kosh on December 26, 2003 02:26 PM

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"Let them eat cake." Still, Sharper Image has wonderful sun-light lamps. My happy little birds love the light. I have become a yupee. Oh dear.

Posted by: anne on December 26, 2003 03:04 PM

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Hmm, battery-operated nose-hair trimmers for under$50?

Posted by: Kosh on December 26, 2003 03:32 PM

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I did all of my shopping, and I do mean *all* of my shopping on line this year. I also spent about three times what I've been able to afford over the last several years.

Posted by: Unseelie on December 26, 2003 04:28 PM

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"Early figures show big leap in online sales" http://www.chron.com/cs/CDA/ssistory.mpl/business/2322531 Two estimates shown of increase in holiday sales: 21% and 42%!


Posted by: David on December 26, 2003 09:43 PM

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The font in the quoted selections is too small!

Posted by: alf on December 26, 2003 11:54 PM

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Brad

Please enlarge the font a bit in the quoted sections. Some of those who read and love you do not see as well as we would wish.

Anne

Likely it will turn out that sales growth before Christmas is lower than hope and after Christmas higher than expected. For all the hype about luxury, middle class households hacve to be increasingly price conscious and will shop sales.

Posted by: anne on December 27, 2003 04:29 AM

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There is always an irony in waiting for each drop of consumption when we need to be saving so much more.

Posted by: anne on December 27, 2003 04:59 AM

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http://www.nytimes.com/2003/12/27/business/worldbusiness/27adeg.html

As Europe Ages, a Grocery Chain Extends a Hand
By TANIA RALLI

If Walter Fischer forgets to take his glasses when he shops for groceries at the Adeg supermarket on the outskirts of Salzburg, Austria, it is not a problem.

"I don't have to bend down to see the prices on the lower shelves," said Mr. Fischer, 48. "The tags are big enough that the prices are easy to read." If he still has trouble, he can borrow a pair of reading glasses from the store or simply reach for one of the magnifying glasses hanging from chains in the grocery aisles and dairy cases.

The Adeg Aktiv Markt 50+ is Europe's first supermarket designed for shoppers over age 50. The labels are big; the aisles are wide; the floors are nonskid, even when wet; and there are plenty of places to sit down.

The market, which opened in May, is the first attempt by Adeg, a subsidiary of the German food company Edeka, to address Europe's most pressing demographic trend: an aging population. The median age in Europe is 37.7, but it is expected to rise to 52.3 by 2050 because of a plummeting birth rate and a longer life expectancy. A quarter of Austrians and a third of Germans are expected to be 60 or older by 2015. In the United States, the population is aging, as well, though not as rapidly as it is in Europe, and the median age of 35 is expected to remain steady over the next 50 years.

Kurt Erlacher, the project manager with Adeg who oversaw creation of the new market, sees some distinct advantages in pursuing the older shopper. "This group has a lot of buying power," said Mr. Erlacher, who is 44. "They have already paid off their homes and cars. Their children are out of the house. Their disposable income is higher." ...

Posted by: anne on December 27, 2003 05:50 AM

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Dear Brad

Please add a little to print size for quotes. Poor old eyes....

Posted by: lise on December 27, 2003 06:39 AM

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Most modern browsers will let you change the font size on your end nowadays...

Posted by: Unseelie on December 27, 2003 08:47 AM

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Not a good idea to change our fonts. Older readers of the wondrous Brad DeLong need to be considered. Please add to the font for our sakes. Note the post by Anne....

Posted by: lise on December 27, 2003 08:58 AM

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http://www.nytimes.com/2003/12/27/business/worldbusiness/27adeg.html

As Europe Ages, a Grocery Chain Extends a Hand
By TANIA RALLI

- If Walter Fischer forgets to take his glasses when he shops for groceries at the Adeg supermarket on the outskirts of Salzburg, Austria, it is not a problem.

"I don't have to bend down to see the prices on the lower shelves," said Mr. Fischer, 48. "The tags are big enough that the prices are easy to read." If he still has trouble, he can borrow a pair of reading glasses from the store or simply reach for one of the magnifying glasses hanging from chains in the grocery aisles and dairy cases. -

Posted by: lise on December 27, 2003 09:00 AM

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There needs to be a greater degree of respect for older women and men in this country. The way in which AARP treats the members as abject fools should infuriate us. Notice that AARP mutual funds rather than offering Vanguard like charges, is cost exploitative. Should I start on the attempt to destry Medicare???

Posted by: lise on December 27, 2003 09:10 AM

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"Notice that AARP mutual funds rather than offering Vanguard like charges, is cost exploitative"

Yep. It was mentioned here a couple of weeks ago and I checked it out. The Scudder/AARP stock funds have so-so expenses and mostly average or below average performance (typically 2 or 3 stars by Morningstar). Even the S&P500 index fund has a too high .4% expense. I guess this constitutes a hidden AARP membership fee rather than the membership perk I would expect it to be. Yet on the AARP site they have a general tutorial on how to choose a mutual fund, and if you followed it you would almost never choose one of theirs.

Posted by: snsterling on December 27, 2003 11:12 AM

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I was just at the Lighthouse Outlet Mall in Michigan City Indiana, and by far the busiest store was the Coach outlet, thus proving that it's only the rich and the high end retailers who are doing well...

Except funny, the crowd looked pretty downmarket to me. Maybe it's just that the blue collar middle class (which is pretty much who shops at this mall-- I heard everything from Polish to Urdu spoken around me as I shopped) is only spending money on high end brands like Coach. In which case the success of such brands and weaker sales for downmarket brands would tend to indicate the exact opposite of what people are saying, that only the rich can afford to shop at all.

Posted by: Mike G on December 27, 2003 02:52 PM

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