Each week, watchers of the retail industry release two different flash reports on the latest sales. The reports, out Thursday, show that late October showed the best numbers in over a year, but as we’ve seen in housing, car sales, manufacturing, and just about everywhere else, the credit crisis and subsequent recession have set the U.S. economy back several years.
From its survey of 32 chain-store companies, the International Council of Shopping Centers (ICSC) said luxury department stores showed their first year-over-year increase since May 2008, but consumers are not yet splashing out: the best same-store sales increases were posted by discount stores (2.5 percent), drug stores (3.4 percent) and wholesale clubs 4.3 (percent).
This graph shows the full ICSC data set since 2005, seasonally adjusted:
Another source of retail information, the Johnson Redbook, reports sales at the company level. October’s biggest same-store gains came from Costco and Walgreen’s, and in apparel, Ross Stores and TJX. At luxury stores, Neiman Marcus’s sales were down six percent, while Nordstrom’s were ahead by 6.5 percent.
Johnson Redbook also reports total sales fiscal year 2009 (through October). The whole industry’s sales are down about one percent, while warehouse and drug stores are up between two and three percent. Department stores as a group are down nearly six percent.
So consumers are buying a little more. But we’re only five percent above the low point of December 2008, and spending at a level about equal to late 2006 (before adjusting for inflation.)
The rest of the year looks pretty bleak. The ICSC announced on November 4 that consumers expect to spend more on gifts (but less on gift cards) this holiday season than last, without getting specific. When I looked up the year ago press release, I could see why they are downplaying it: 2009 is forecast at $543 spending on gifts, versus a forecast of $533 last year - an increase of $10 per person, or not quite two percent. Gift card purchases are expected to be lower, by an unspecified amount.
What else can we expect when somewhere between 10 percent and 20 percent of people are out of work?
But consider this insightful comparison by Casey Mulligan in the NYTimes economics blog. It shows that consumption has not fallen as much as employment; does that mean that an upswing in consumption won’t come until employment is restored to the levels of mid-2008?
