It was bound to happen sooner or later. People stopped shopping. Well, they didn’t stop all together, but enough to make a sharp drop in retail sales for the month of April. A 2.4% fall in sales to be exact, the worst year-over-year showing by major retailers since 1970, which is when they started keeping track of consumer sales.
All the big retailers, discounters, and department stores took a big hit, including J.C. Penny, Kohl’s, and Federated Department Stores, Macy’s parent company. Gap sales dropped a whopping 16%, and American Eagle Outfitters who usually does well because of teenage sales, dropped 10%.
But the most surprising was that of Target and Wal-Mart. Target sales dropped 6.1%, while Wal-Mart, the largest retailer in the world said it was it’s worst performance in all it’s 28 years. (N.Y. Times & L.A. Times)
Collectively, the retail industry reported it’s worst monthly sales slump in (drum roll, please) at least six years. Rather significant, don’t you think?
But wait… all is not gloom and doom. Luxury chains did well, especially Saks, Inc. whose sales increased 11.7% last month. And in another encouraging story about the economy, the New York Times reported last week on a current trend in New York nightclubs. It’s called “bottle hosts”.The best tables are given to those willing to spend the most on a bottle of liquor. One club has a table minimum of two bottles of liquor or Champagne at $350 per bottle. One brand of Champagne cost $1,600 a bottle and the average liquor tab per table at one club is about $3,500 with some tables bringing in $12,000 or more.
Notice a disturbing trend here? Sales at Target and Wal-Mart, staples of the lower and middle-class, drop significantly while luxury sales climb.
Retailers and economists tried to make excuses for the dismal sales, saying Easter was early, and that it was too cold and rainy. Perhaps. Or maybe people are just running out of money.
Consumers are getting squeezed from all directions. Gas prices continue to climb with no apparent ceiling in sight. In Southern Cal, where I live, the cheapest gas is now $3.49 a gallon, with threats of $4.00 a gallon gas by summer’s end.
With the housing slump, many homeowners no longer have as much equity to borrow against, and those who bought with sub-prime lending may very well lose their new homes with the rise in interest rates.
And somehow, with everything else going up, wages stay stagnant. So, I would guess, that by the time a family scrambles to make the increased house payment, and fill the car with gas with $40, $50, $60 or more, there isn’t much left over for anything but utilities and groceries.
Certainly not a $350 bottle of Champagne.
“Let them eat cake!"
Wrongly attributed to Marie Antoinette to the starving peasants as they rioted on the eve of the French Revolution. In reality it was said one hundred years prior by Marie-Therese, wife of Louis XVI.
Cheri Cabot, Politics Correspondent
Cheri’s column, “Personal About Politics”, published every Tuesday, will reflect on how the life of a 57 year-old, middle class woman is affected by politics, policy and the current state of the nation - a look at the personal aspects of politics. The articles will be posted to Politics.gather.com as part of Gather Essentials.
Cheri is a single teacher and writer, living in Southern California. She has two grown children, one in Iowa and one at Columbia University, and is the proud grandmother of two. Cheri is also a purveyor of fine coffee, warm chatter and dry wit.
You can find all of Cheri’s columns on Personal About Politics at www.ccabot.gather.com. Keep up with Cheri’s other postings and Gather activity by joining her Gather network at www.ccabot.gather.com, and select the orange “Connect” button on the left-hand side of the page.
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Comments: 40
You forgot to mention "pet foods". Many of us have pets-From dogs to cats, birds and reptiles- even their prices have gone much higher and in the end one is never sure if the food is tainted or not.
I am thinking of growing my own vegetable now-in small potted plants outside my balcony but i wonder of the government gets a peek of this new method, they will increase the prices on the seeds too...lol
Surprise Surprise.
However, as the government keeps the cost of fuel and food out of the inflation calculation, this will not ever be called inflation, but only the value of the dollar going down
Oh no, wait, that was "They're better off in the Superdome than they were..."
Same difference, really, though. Uncaring, unthinking, unchristian wealthy-by-birth-or-marriage inbred fools speaking nonsense. And folks like Capt. S. lapping it up as if it were truth... *snicker*
You hate Americans so much, there's a whole world to live in. I suggest Afghanistan, they are a frugal people, and I'm sure many share your hate of the common American here.
Good one Cheri... a ten
The "let them eat cake" attitude is what prevails today by the have's and the have more's as GWB likes to call them. The thing is: without a middle class there is no lifestyle worth living in America.
thanks for all the great comments.
I offered a solution and the response from Ron W was to tell me I hate Americans and call me an imbecile. Maybe you should ask him. Although it seems he suffers from extreme cranial anal insertion and might not be able to think clearly long enough to have a coherent exchange of ideas.
There's a vast sea of people in this country that live in conditions similar to many third world countries. No, they are not illegals. When you rent an apartment you need first month, last month, and a deposit. Try that on a part time salary from MacDonalds. How about the gas you need to go to and from work? I don't know where you're from but the homeless population in most areas is on the rise. Not just men, but whole families. Some of them live out of cars. Dad goes to the Circle K bathroom to shave and wash up, then heads for work. Mom takes care of the children. They can't eat out of their car, so they need buy food at the grocery or fast food chain or whatever bin they can find food inside of. Then mom takes the kids to the Circle K to wash up. Yes, there are organizations that help people in these situations, but they don't have the funds or the staff to take care of the huge number of people in need. Our country is failing a vast number of its population. Not putting a ceiling on oil helps drive up the rate of inflation. Cost of goods includes transportation, and when the cost of transportation has gone through the ceiling, prices for goods will follow suit. The little guy is who takes the biggest hit. It's simple math and it doesn't work.
Interesting to note that in Massachusetts, Macy's in Burlington, Mass. once a farm town then a tech town with a large mall, will be hosting Nordstrom's and 22 other shops in 2008 - so, Macy's has gone "Better Sportswear" only - meaning, no "Moderate" clothing - cotton tops, sweaters, casual slacks, sweats, etc. that people wear every day.
And the new Macy's in Chestnut Hill,MA has gone High End Only.
Which seems to add grist to what you've said here.
But my dept. of Moderates Sportswear in my small store (a standalone) not a mall, is doing so well that I'm home sick for a few days from overwork.
Demographics, demographics, demographics.
Is the real estate mantra changing from location, location, location?
My reference was to the poor people in this country not the destitute. I am well aware of the population that lives under bridges in boxes and in sewer run off pipes. That is a tragedy that goes unattended in this country. But they are not our poor and the population segment of third world countires that compares to our poor are closer to our destitute than they are our poor people. Those people, the destitue ones in our country, are truely the ones that need individual and governmental assistance but they go unnoticed while our poor people stand in grocery lines in hundred twenty dollar Nike shoes buying steak and eggs . It is a measure of our moral hypocracy.
As for boycotting the oil companies. Better watch out making those statements you'll have Ron W calling you an imbeceil. Well... if he is at least consistant in his philosophy.
I had to do a little research on that (grin). Too many Louis for my taste!
Thanks for all the great comments. I was hoping to stir up some interest.
On line sales of clothing and shoes hit a new high in april, and exceeded the dollars spent on-line on music.
Amazon is reporting record breaking sales figures.
PetSmart is reporting record numbers.
Declaring consumer spending dead because old line department stores had a slow month is like declaring reading dead because newspapers circulation figures are down.
Retailing is a touch business, but companies that are selling what consumers want to buy are doing well
Talk about holes big enough to drive a truck through, what about your statement, "companies that are selling what consumers want to buy are doing well." That is simply rhetoric, and it is a biased sample - it means nothing. What companies are those? Where did you get your information, or did you just make it up? That's your own personal opinion, and it doesn't prove that the economy is healthy.
Let's talk about PetSmart's figures after next quarter after the pet food scare.
If just look at April sales, you may believe that the doom and gloom prediitions you seem so attached to. But take a look at the March numbers. They were up, and most retailers warned that they expected as weak April.
Do you need a link to prove that?
http://online.wsj.com/article/SB117668148589570733.html?mod=MKTW
7D&siteid=yhoo&dist=yhoo
I cannot give you a link on the online sales figures because it was a news story on CNBC, on TV.
You cannot ignore the on line channel when looking at retail sales.
Even if it makes you feel better to think that I made that up, it doesn't change the facts.
And on the Petsmart thing: if it was the pet food scare, that goes a long way to explain the Walmart short fall.
If you want to talk about bias, the fact that you listed The Gap as an example made me laugh. The Gap has been having trouble for several years now. They have just announce that their second turnaround attempt has failed.
Retailing is a tough business, and no company stays on the top very long.
getting a bargain at the local independent - $3.18
Maybe we're closer to a refinery or something.
gas stations whenever possible. If the big guys knew that more people were
going to independents (which are cheaper, on average) then
maybe they'd lower their gas prices. Those one-day boycotts don't work!
Let him them in the pocketbook where they'll feel it!
Excellent article cheri. With the usual naysayers, I see. Hi Capt Crunch! Good to see ya.
You know, everyone is aware of the growing divide between the poor and the rich in this country. It's public information. What's more, that divide is going both ways , so that middle class will actually not exist soon. It always cracks me up when Bush supporters say things like the poor expect it all to be handed to them. Please! The poor are lucky to get the paychecks they have now. Oil companies record profits, drug companies record profits are the proof that there is gouging in the industries that give the most to Bush and co. Guess we know who patronizes those wine bars!
and saw gas prices at different gas stations
on the same road that varied by 20 cents
or more.
That proves gas prices are manipulated.