In response to Oconomy: Shoppers Spend Less on Holiday Purchases:
That is so not good news. Retail operations will suffer from reduced income during the crucial holiday season – at a moment when their labor costs are rising dramatically, and the “living wage” dimwits want to make it even higher. Expansion plans will be scuttled. Payrolls will freeze, or be cut even further.
Bad holiday retail sales are also a dire portent for economic growth in the coming year. Among other things, retail operations will order less inventory. Nervous consumers today mean jittery manufacturers tomorrow.
General uncertainty and economic malaise might have been factors in pushing sales numbers down; Americans are watching their government fall apart, there’s good reason to begin worrying about the already poor employment figures getting worse again, and an Administration curled in the fetal position over ObamaCare has little energy or credibility to spread the kind of economic happy talk that can make a difference at the consumer level.
I get the sense there was a lot of inventory dumping during this holiday season, which could account for both reduced retail income and razor-thin profit margins. I also wonder if the increasingly unpleasant brick-and-mortar shopping experience – which has gotten so bad that retailers created “Black Thursday” to thin out the Friday mobs – is pushing sales down overall. Online shoppers are far less susceptible to impulse buys, and they’re not going to grab an item because the advertised price seems “good enough.” The whole experience is different (and generally superior from the consumer standpoint) when you can shop online, perform instant price comparisons, think about what you’re buying, and access review information about products immediately. I would not be surprised if retailers are paying a price for the Internet invalidation of all the techniques they’ve used over the past few decades to create the Thanksgiving weekend shopping phenomenon.