Thursday, December 4, 2008

Retailers Report Terrible November

From the WSJ:

Retailers reported some of the weakest sales figures in years for November, with many missing downbeat expectations, but Wal-Mart Stores Inc. continued its recent outperformance as it topped estimates on increased store traffic and transaction size.

Let's think about this for a minute. Retailers already lowered expectations. And then the sales figures came in lower than the already lowered expectations. That's not good.

Thomson Reuters noted discounters as a whole were the only retail segment expected to post same-store-sales growth for November, thanks to Wal-Mart. In contrast, department stores and apparel chains -- both of which have been struggling for some times -- were seen reporting double-digit declines. Both segments met those expectations.

So -- without Wal-Mart's increase the discounters would have reported worse numbers. That's great news. And the other types of stores all reported bad numbers. This development shouldn't be a problem. Note that personal consumption expenditures have been dropping for some time:


As have retail sales:


Let's take a look at some of the retail sectors to see what the charts say.

The above chart (and the charts that follow) are from Notice the overall retail sector chart fell off a cliff a few months ago and is currently near 5 year lows.

Notice on the charts that follow of various sub-sectors of the retail area that prices have been dropping for some time:

Bottom line: retail is hurting badly.