Consumer Spending Falls Sharply In July As Major Retailers Lose Ground

[marmar]

from 24/7WallStreet:




Consumer Spending Falls Sharply In July As Major Retailers Lose Ground
Posted: July 29, 2010 at 10:43 am


One of three respondents in a recent survey said they would spend less on consumer goods over the next 90 days than they said they would in June. The drop was 6 percentage points to 32%. Those who said they planned to spend more in the next 90 days declined to 30% to 38%, an especially sharp drop-off in such a short time.

Vacation, consumer electronics, restaurants, and durable goods will all be affected, a sign of how broad-based the pullback is. People who plan to spend money at large retailers particularly Walmart (NYSE: WMT), Target (NYSE: TGT), and Costco (NASDAQ: COST), and Best Buy (NYSE: BBY) plunged with many of the predictive figures moving to multi-month lows.

Shoppers who intend to go to Walmart in the next 90 days fell four points. The figure was five points for Costco, the largest drop in six months. Plans to shop Best Buy in the next 90 days dropped to a 17-month low. Intentions to shop Amazon.com (NASDAQ: AMZN) also fell sharply. The data are from a Changwave survey completed on July 9 that polled 2,795 consumers.

The survey confirms information from other private organizations like the The Conference Board and the University of Michigan. All the figures point to a sharp slowdown that began in June and is likely to go through the third quarter at least. Many economists believe that second quarter GDP to be released on Friday will be up by no more than 2%, mostly due to June activity. The third quarter could be weaker.

The data also make it likely that third quarter retail earnings will be weak which leaves only the holiday season for companies like Walmart and Target to make their profit forecasts. The year may be as miserable as 2008 was if sales in October and early November are not robust.


-- Douglas A. McIntyre

[ixion]

1. Ah, gee, that's just those pesky consumers hesitating to drink the Kool-Aid and rack up more debt.

Everything is a-okay. Nothing to see here. :sarcasm:

[eilen]

2. People tend not to spend when they don't have income

sufficient to pay for shelter and food.

I asked my girlfriend-- What is at Walmart or Target that you can't find somewhere else or do without? She hemmed and hawed for about 3 minutes and said, "you know, I really can't think of any except for those onions in red sauce I put on my hotdogs.... come to think of it, I just found them at Price Chopper."

This is a person who used to go there almost every other day. Stores are losing their cache' as entertainment/shoppertainment.

What that song by the Clash?


I'm all lost in the supermarket
I can no longer shop happily
I came in here for the special offer
A guaranteed personality

I wasn't born so much as I fell out
Nobody seemed to notice me
We had a hedge back home in the suburbs
Over which I never could see

I heard the people who lived on the ceiling
Scream and fight most scarily
Hearing that noise was my first ever feeling
That's how it's been all around me

CHORUS

I'm all tuned in I see all the programmes
I save coupons from packets of tea
I've got my giants hit discotheque album
I empty a bottle I feel a bit free

Kids in the halls and the pipes in the walls
Making noises for company
Long distance callers make long distance calls
And the silence makes me lonely

CHORUS

It's not here, it disappeared.

It will be nice when people identify more from their communities than the shops they visit.

[ThomWV]

3. Do you understand the trap that is set with that statement?

We are citizens, not consumers.

[Tsiyu]

4. Well the retail giants

no doubt lobbied their bought and paid for congressspersons to not extend unemployment benefits.

They pay increased premiums the more claims are filed when they have mass firings/layoffs, so I could see the retail sector lobbying against extended benefits.

Perhaps they forgot ...people won't spend money in their stores if they have no money.

What a concept!

That top 1% must imagine we Little People can just produce money out of thin air. Amazing!