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Why are retailers crying?

November 30th, 2008 at 02:41 pm

I just found a chart from the National Retail Federation.

Retailers and Wall Street have been boo-hooing about what a terrible year it's going to be for holiday shopping. I don't get it.

Sales are projected to rise 2 percent this year.So why are retailers acting like it's the end of the world if sales are still higher than last year???

7 Responses to “Why are retailers crying?”

  1. Analise Says:

    I think the concern is that they won't make the 2.2% growth. But, even if they only maintain last year's amount of $460.20B, I'd say that is not too shabby. Maybe the hype is just another tactic to get consumers out to spend, spend, spend.

  2. thriftorama Says:

    I think it's hype. Most of the other stories I've read have said retailer's Black Friday numbers were up 2 percent over last year, but stores are still boo-hooing.

  3. Koppur Says:

    Greed?

  4. bennyhoff Says:

    This is always one of those oddities to me too. I the logic is as follows:

    Since so many new stores have opened since last year, to "keep steady", growth of "X%" is needed. Plus with a certain growth in the population each year, more sales are expected. Also, certain growth is expected by investors each year, otherwise they would pay less for their stock.

    With that all said, I still find it hard to believe that growing sales is considered a "downturn".

  5. disneysteve Says:

    A certain growth rate is needed to cover rising costs, rising salaries, rising health care premiums, rising rents, expansion of the chain, etc. Businesses have to deal with inflation just like the rest of us. If inflation is 4% and income only rises 2%, the business loses ground year-to-year. That necessitates spending cuts, reducing benefits, delaying expansion, laying off workers, etc. It may sound like greed, and in some cases it probably is, but it is also financial survival.

    Every report I've seen indicates that Americans are cutting back this year, being more careful with their shopping, looking more for bargains, waiting until later to shop in order to get even better deals. One survey I saw this morning said 21% of those surveyed planned to wait until after Christmas to do their shopping because they expect prices to be rock bottom then. With that kind of mentality, I think retailers have good reason to be concerned.

  6. monkeymama Says:

    Actually, revenues are up, but income is down. They got shoppers in by cutting prices on everything.

    There is much more to business than sales numbers.

    But regardless, it does seem the panic is a little premature. IT's like the housing bubble. YEars of unprecedented growth, and the first time things turn around, everyone panics. Though prices and sales are all much higher than a decade ago.

  7. baselle Says:

    I've been noticing an amusing trend if you're a data geek. Usually the first announcement of an economic stat is some variant of "better/worse than we thought", then it gets edited. In other words, the real Black Friday stats get buried in the news sometime around Christmas. Note the CYA word: estimate.

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