J.C. Penney Co., Nordstrom Inc. and Gap Inc. all reported sales drops of 10 percent or more at stores open at least a year. The decreases were less than some analysts estimated after 50 percent-off discounts lured customers grappling with the U.S. recession. Wal-Mart Stores Inc. posted a 3.4 percent gain, beating its forecast...And finally?
...Limited Brands Inc., the owner of the Victoria’s Secret chain, dropped 12 percent, while Costco Wholesale Corp.’s global sales declined 5 percent. Abercrombie & Fitch Co. plunged 28 percent. The teen apparel retailer, known for its shirtless male models, said last month it won’t use promotions to lure shoppers to protect its brand image.
"The news out of Costco and Wal-Mart wasn’t really that bad,: Jessica Hoversen, a foreign-exchange and fixed-income analyst at MF Global Ltd. in Chicago, said in a Bloomberg Television interview. "That’s definitely a positive, and Black Friday sales weren’t as bad as everyone thought they would be"...
...The comparable-store sales gain by Wal-Mart beat the world’s largest retailer’s forecast for a 1 percent to 3 percent increase and the average analyst estimate of 2 percent, according to Swampscott, Massachusetts-based Retail Metrics.
“Aggressive rollback initiatives helped kick off solid sales for the month,” Wal-Mart said. Home furnishings, apparel and electronics sales improved.
“Wal-Mart’s pricing message was just overwhelming on Black Friday, it was all about value,” said Sarah Henry, a retail analyst with MFC Global Investment Management.
Higher-income consumers are reining in spending because of stock market declines, said Henry. Neiman Marcus Group Inc. sales fell 12 percent, while Saks had a 5.2 percent drop, better than the 20 percent fall estimated by analysts. Nordstrom Inc. sales retreated 16 percent.All this is the opposite of what had happened during previous Bush downturns. Then, the sales for Wal-Mart declined, whereas the high-end stuff tended to remain the same or better, indicating that the old truism about "the rich getting richer and the poor getting poorer" was if anything an understatement.
December sales may see a lull until the week before Christmas, said Henry.
But look at what's happening now. In an era where lower-income people are being hit hard, numbers for Wal-Mart and Costco are either beating projections or narrowly missing them, whereas Neiman Marcus, Saks and Nordstrom are taking it on the chin. That suggests that middle-class and perhaps even upper-middle-class consumers are sucking it up and heading out to the discounters.
It makes sense since their spending was buoyed by stock holdings, free credit and exploding home values--all of which are gone--but it paints a grim picture for the future. It suggests that the characteristics of American consumption may have been severely changed, and without American consumption, the foundations of the global market system become very weak indeed. Sure, it'll adapt, but what will the new system look like?
edit: The DKos diary was about the pathetic husk of a newspaper that the LA Times has become, by the way. Yes, I'm a blogger, and I've been one for longer than the vast, vast majority of the ones you see out there...and the decline of the newspaper bothers the hell out of me. Blogs are not a substitute for real journalism. They are, still, by-and-large personal opinion pieces.
The fact that the real journalists of the world end up looking for work while the right-wing blowhards keep their bought-and-paid-for conservative-funded bully pulpits is NOT a good thing.