The Old 'We'll Make It Up on Volume" Fail?

Back when many Wall Street "strategists," economists, retail industry trade groups, and others who claim to know what they are talking about were predicting a strong holiday selling season (and the long-awaited return of the free-spending U.S. consumer), I warned that there was much less there than meets the eye (see here and here).

Well, as The New York Times more-or-less confirms in "Retailers Post Sales Gains, but Discounts Hurt," it looks like the so-called experts have been proved wrong once again [italics mine].

December holiday sales figures came in at a decent level, retailers said on Thursday, but not enough to make for a blockbuster season.

Sales at stores open at least a year at major retail chains rose 3.4 percent compared with December 2010, according to Thomson Reuters data, just slightly above the 3.3 percent that analysts had expected.

But those sales were largely gained by big markdowns that will probably lead to lower profits at retailers, and chains including Target, Kohl’s and J. C. Penney lowered their fourth-quarter profit expectations.

Shoppers seemed inclined to buy only when they saw huge discounts, and that suggested American consumers are still not back on their feet.

“Retailers came in with pretty conservative assumptions and they were hoping to blow them out of the water — they really didn’t,” said David L. Bassuk, managing director and head of the retail practice at AlixPartners, a consulting firm. His store visits over the holidays indicated that many of the promotions were “unplanned,” he said, a tactic retailers resort to in response to slow spending.

“Retailers hope that as they plan some promotions on key items, that will entice the consumer to spend money,” he said. “That didn’t happen — the planned promotions were not as exciting as the consumer today expects, so the retailer has to revert back to things that were unplanned, like ‘50 percent off our whole store,’ ‘60 percent off our whole store,’ which is when you can see times are tough.”

...

Mr. Bassuk, the retail consultant, said that with consumers still unwilling to buy at full price, 2012 would probably bring “closing of stores and, I think, closing of retailers. It’s a more dire situation than many had anticipated.”

And yet, the "smart money" types on Wall Street still seem to think they know better. Otherwise, why else would they have pushed the S&P 500 retailing index up more than 5 percent since Black Friday, to within 5 percent of its all-time high?

I guess hope springs eternal (when you're a highly-paid idiot)...?

Comments

[People are hurting]

Thursday, January 5, 2012
A Couple Ominous Signs

As for an ominous economic sign - one which points toward even higher Government spending deficits and debt issuance - this was the headline on the front page of today's Denver Post: Medicaid rolls in Colorado at "all-time historical high" in November. This is not a good sign for the country as a whole because Denver has one of the stronger regional economies, lower unemployment rates and an economy that is not dependent on heavy manufacturing. When something emerges as a demographic trend in Denver, it usually precedes the same trend countrywide:

We've had a mushrooming of clients," Sue Birch, director of the state Department of Health Care Policy and Financing...There are just so many people who have lost their jobs — even those in my family who had really good jobs," said Dolores Rodriguez, while waiting for assistance at Denver's Westside Family Health Center

Here's the article: LINK
http://truthingold.blogspot.com/2012/01/couple-ominous-signs.html

[Erik]

I also love the misuse of same store sales each holiday season. In a contraction, with outlets closing, looking at same store sales will usually juice - or at least stabilize - the numbers.

If I had 4 stores in an area and each sold $100, and now I have two stores and each sells $150 ((some of my would-be customers consolidated and others either stayed home or went to more convenient competitors), then existing store sales look up by 50%! But in reality my business revenue declined by 25%.

Lies. Damned lies. And statistics.

[Empty suits report empty sales...we need to redress]

Try to forward...

Why I Support Ron Paul

Why Ron Must Run Third Party

I support Ron’s attempt to get the Republican nomination even though I recognize that hell will freeze over before the Republican establishment allows him be chosen. Nevertheless, it is a smart move as he is exposing the lack of ideas amongst the Republican field and exposing them as the empty suits that they are. Other than him, they will all be puppets of TPTB just like Obama. I think that simply his running is changing the debate and converting more people to his perspective. So the big question is what should he do after the Republicans choose their new Wall Street puppet Romney. In my opinion, he must run as a third party candidate. No matter what he will not be returning to Congress so this is really his last shot and I actually think he can win as a third party candidate. Just imagine a debate between Romney, Obama and Paul. How will they respond to Paul’s strong defense of civil liberties. Or his attacks on the Federal Reserve system. Or his anti-preemptive war stance? They can’t and it will expose Romney and Obama to be the same guy on the important issues at play today. They will be shown once and for all as the empty suits that they are. Even if he doesn’t win, turning this whole thing around will not happen overnight. It is a process and him running as a third party candidate will further expose the two party system as the sham that it is and further accelerate the demise of both parties. In fact, I already think that by 2016 the Democratic party will be essentially a shadow of its former self and the Republicans may be as well if they continue on the path they are on much longer. To paraphrase Shakespeare. The tides in the affairs of men are changing. Neither political party can comprehend it.

http://www.zerohedge.com/news/mike-krieger-why-he-supports-ron-paul?

[sharonsj]

Sorry but a good deal of Ron Paul's ideas are unworkable. I might agree with ending the war on drugs and not being a military empire, but generally Paul is mean-spirited and racist. And if he's such a strong defender of individual liberty, why would he outlaw all abortions?

He would also end too many programs the nation needs. Half the country is now poor and can't survive without government help. Paul is the kind of libertarian who thinks that if you haven't got the money for a doctor, you're out of luck.

[Empty suits report empty sales...we need to redress]

@sharon why is he a racist?

Progressives and the Ron Paul fallacies

Whatever else one wants to say, it is indisputably true that Ron Paul
is the only political figure with any sort of a national platform —
certainly the only major presidential candidate in either party — who
advocates policy views on issues that liberals and progressives have
long flamboyantly claimed are both compelling and crucial. The
converse is equally true: the candidate supported by liberals and
progressives and for whom most will vote — Barack Obama — advocates
views on these issues (indeed, has taken action on these issues) that
liberals and progressives have long claimed to find repellent, even
evil.

His nomination would mean that it is the Republican candidate — not
the Democrat — who would be the anti-war, pro-due-process,
pro-transparency, anti-Fed, anti-Wall-Street-bailout, anti-Drug-War
advocate (which is why some neocons are expressly arguing they’d vote
for Obama over Paul). Is it really hard to see why Democrats hate his
candidacy and anyone who touts its benefits?

http://www.salon.com/2011/12/31/progressives_and_the_ron_paul_fallacies/singleton/

[roger]

Ron Paul is a proponent of the Austrian school
of economics, which is an idealist view favoring
laisser faire policy,but does not take into account
the selfish behavior of the human species,he is also
way to chummy with the extreme right wing elements
such as the John Birch society. I could however support
his foreign policy, lets not forget that once in the
oval office he would loose his independence.
His Republicanism is a cover up.

[Upside down]

MUST WATCH: Phil Donahue on Ron Paul & Foreign Policy

He's is an unapologetic liberal, and still, Ron Paul's message makes perfect sense to Donahue.

http://sgtreport.com/2012/01/phil-donahue-on-ron-paul-foreign-policy/