U.S. retailers’ sales declined last week the most in almost six years as steeper markdowns before and after Christmas failed to salvage what may be the worst holiday shopping season in four decades.
Sales at stores open at least a year fell 1.8 percent in the seven days through Dec. 27, the International Council of Shopping Centers and Goldman Sachs Group Inc. said today in a statement. That’s the biggest year-over-year drop since February 2003. Holiday comparable-store sales may decline as much as 2 percent, according to the New York-based trade group.
What is even more sad is that calculations show that, despite killing queues at the mall’s discount season openings, US consumers spent 20% less on electronics, jewelry and woman’s clothing, or the products who earned the biggest gross margins for the retailers.
The retailing index shows also a dramatical drop compared to the previous months, showing that the retailers are now facing the wave of the recession, with prudent consumers withelding their spending. Even with 70 percent discounts, “lackluster” products and consumers’ efforts to stay within their budgets may “make it more challenging to clear goods,” Roxanne Meyer, an analyst at UBS Securities LLC in New York, wrote yesterday in a note.
The index doesn’t include Wal-Mart Stores Inc., the world’s largest retailer, which fell 24 cents to $55.11 yesterday in New York Stock Exchange composite trading. Wal-Mart shares gained 16 percent this year before today.
“Wal-Mart looks to have had the best holiday season as consumers sought out the best value,” Brian Nagel, a retail analyst at UBS, said yesterday in a Bloomberg Television interview. “Other than that, it was pretty weak across the board.”
Despite these news, we at www.doitinvest.com do not see a brilliant future for Wal-Mart, which is highly dependant on the US markets and has a poor international base…