As I expected, consumers simply aren’t buying Christmas goods in the same quantities or at the same pace as in years past. They’re just plain tapped out. They don’t have the disposable income to spare.
There were plenty of forecasts about this. For example, the Wall Street Journal wrote:
Retailers are ringing bells as they head into the holiday shopping season—alarm bells, in many cases.
“Corporate earnings from big apparel retailers have been shockingly bad,” say economists at BNP Paribas. Some have reported inventory backups that suggest demand is slowing, a threat to fourth-quarter economic output after a third quarter that turned out to be better than initially estimated.
. . .
Retailers’ warnings have coincided with weak retail sales in the government’s official figures, confirming a broader slowdown in the sector despite cheap gasoline, strong job growth and early signs of faster wage growth. Retail sales have largely stalled in recent months, extending the lackluster streak this year. Americans have curbed discretionary spending lately on items like electronics and appliances, and in its most recent report the Commerce Department said shoppers more than halved their spending at retailers in November from a year earlier.
That pullback is showing up in corporate earnings reports and it’s prompting downbeat forecasts for the holiday quarter.
. . .
The results underscore the challenges of the economic expansion, which has been plagued by weak demand and slow wage growth for most Americans.
There’s more at the link.
After enough time to gather and analyze the data, those forecasts have proved to be correct. For example, Investment Research Dynamics reports:
Total sales in the US on Black Friday fell 10% to $10.4bn this year, down from $11.6bn in 2014, according to research firm ShopperTrak.
Store-based sales dropped $1.2 billion, while online sales increased $150 million. The media is going to highlight the increase in online sales. But remember, online sales represent only 6% of total retail sales. The plunge in brick-and-mortar sales was nearly 10x greater in total dollars than was the increase in cyber sales.
Again, more at the link.
I’ve been watching closely to see how traffic looks at major shopping centers in the Nashville area. Weekends are a madhouse at places like Opry Mills or the upmarket shopping centers south of the city in Brentwood; but a lot of that appears to be people coming in from out of town to shop at the big centers. On ordinary weekdays, and at smaller shopping centers, there isn’t much of a crush at all. I’m also seeing people buy less in the way of frills and fripperies, and more in the way of real household needs. I suspect a lot of kids may be getting new bedding or clothes, rather than toys or baubles.
For ourselves, Miss D. and I have bought each other a house in Texas. That’s all the Christmas present we’ll need!
Local UPS driver told us they had the three largest delivery days in their history this month.
I tend to agree with you in spite of that data point.
Yep. Working retail right now, we solicit contributions for a local charity at the register. Contributions are off by about 25% from last year. Sales look to be down, too.
It will be interestign to see what the final numbers are when they include online as well as brick and mortar. The only times I go into a store any more are to buy groceries or something I have to try on to make sure it fits. Everything else lands on the porch.
As for what I'm spendng on, it's ammo, long term food, high quality cold/foul weather gear, tools, spare parts. Not a bit of frippery in the bunch.
I'm Christmas-ed out. Grandkiddies will get personalized gifts, probably books. Everyone else gets $25 Amazon gift cards. That I'll be paying for for a couple months.
Don't forget communications… battery operated old-fashioned two-way radio.
Gun & ammo sales are up.
High gas prices have sucked up discretionary income for several years now.
A few months of cheap gas isn't nearly enough to stimulate a recovery.
In addition, people are starting to really doubt the administration's story that things are getting better.
They're looking around and believing their lying eyes instead of media fairy tales.
Weekends – busy with people coming into town to shop. Weekdays – not overflowing like I'd expected. And the E-tailers are deep discounting like mad, especially the specialty semi-luxury places.
I suspect people around here are leery because 1) oil prices are dropping so the economy is getting softer, 2) cattle prices are still down, 3) insurance, 4)everyone's nervous about next year, both the election and security. Lead and brass are popular gifts.
I can't speak for anyone else but I've barely started my Christmas shopping.