Retailers' sales slumped in December, with even Wal-Mart Stores Inc. bending to economic realities by cutting its earnings expectations for the current quarter.
Other U.S. retailers also cut their outlooks, including Gap Inc., Pacific Sunwear of California Inc., Macy's Inc. and Ulta Salon, Cosmetics & Fragrance Inc.
Retailers' November results were terrible, made worse by the fact that the timing of Thanksgiving last year pushed some post-holiday sales into December. But the spillover did little to bolster December's numbers.
Wal-Mart, which has benefited from bargain-hunting in a weak economy, reported that for its US. stores open at least a year sales, excluding gasoline, grew 1.7% last month amid a 1.9% increase at its namesake chain and 0.1% rise at Sam's Club.
This shouldn't be surprising; retail sales in particular and personal consumption expenditures in general have been terrible. Consider this from the latest Fed minutes:
Real personal consumption expenditures (PCE) fell for the fifth straight month in October, with the slowdown evident in nearly all broad spending categories. Sales of light motor vehicles, which slumped in October, fell further in November, but the available information on retail sales suggested a small increase in real outlays for other consumer goods. The annualized three-month change in spending on services in October was just one-third of the rate registered in the first half of 2008. Preliminary data for October and November suggested that overall fourth-quarter real spending would receive a modest boost from recent price declines for gasoline. Real incomes were also boosted by the reversal in energy prices, though the negative wealth effects of continued declines in equity and house prices likely offset this somewhat. Measures of consumer sentiment released in November and December remained low, and available evidence suggested further tightening in consumer credit conditions in recent months.
