Comments on: "Retailers Report a Sales Collapse"

By: Anonymous

Anonymous — Fri, 07 Nov 2008 15:18:00 +0000

I (as usual) agree with Richard. If there is a slowdown in consumption, it is cloaking itself very effectively in my area. I rarely go to the mall but had to pick up a few things before a trip to London in October. The vast parking structure at this mall did not contain a single open parking space. Slowdown indeed! And while we’re on the subject, I went out for a walk in London (I was staying in the Mayfair area) and strolled down to the Thames. The sheer number of tourists was astounding. I had to turn back. I could see across the river the hordes queuing to pay vast amounts of cash to get themselves into the contraption known as the London Eye. I know the decrease is happening only at the margin, but seriously, this was stunning.

By: originaldd

originaldd — Fri, 07 Nov 2008 14:24:00 +0000

Max agree. Just returned from SF. Saks had virtually nothing on sale. Macy’s “sale” was 40% off items that were marked up 100% from prices the year before (ie many items were overpriced out-of-sight and “reduced” 40%). Only good shopping was at Loehman’s.
In Chicago, the “Chicago Place” an 8 story Michigan Avenue shopping mall is empty with only a Saks and Talbotts, two small retailers and the fast vanishing food court. Still the Saks “sales” were paltry. Macy and Bloomingdale’s ditto. Filene’s Basement has an amazing array of really high end designer goods, but again who cares if a $3,000 “retail” is “marked down” to $1500?
The high end retail industry is hanging tough for the higher prices, promoting nonexistent “sales” and ever hopeful the shoppers will come for Christmas.

By: Let It Sink

Let It Sink — Fri, 07 Nov 2008 14:12:00 +0000

This is a luxury based economy. People buy new clothes and cars not because their old ones are too old to be repaired, but because they are last year’s model or color. This makes probably 50% or more of the consumers’ purchases purely discretionary. People do not need to be broke to stop spending because they don’t actually need anything they buy. With the exception of basic foodstuff and gasoline, Americans can probably chop 50% of their spending and feel no pain whatsoever. Sure, there’s the embarrassment of driving a 3 year old Lexus, but if the Joneses are still driving a 3 year old BMW, maybe they can get over that too.

By: Richard Kline

Richard Kline — Fri, 07 Nov 2008 09:17:00 +0000

I would say more, in the near term, scared is scared. When one has to wonder, seriously, whether one’s cash flow in the bank might be frozen or vanish—and this was a real concern in October, and may well be again over the next 18 months—there is a powerful disincentive to curtail any discretionary spending and hoard cash. We are seeing some of that effect this Fall. By 2009 as job losses bite, and firm bankruptcies really begin to suck money out of the real economy, we will be talking more nearly of ‘broke.’

Personally, I, too, don’t see these massive sales and absent crowds. But I live in the city center of a comparatively prosperous urban area which traditionally lags the real economy in the rest of the country by 3+ quarters. We’ll get it in the neck in due course, but mostly after 1 Jan.

We are entering a consumer environment which no one under 45 ever lived through managing their own budget. I will be somewhat fascinated to watch the results. Personally, the ‘new frugality’ seems to me a media invention; I don’t see it, and social trends just don’t turn around that quick. A generation who has lived on debt doesn’t learn new skills and ways in a few months. It’s their kids, everyone 15 and under, who will absorb a new social conditioning, that’s my view.

By: Max

Max — Fri, 07 Nov 2008 09:05:00 +0000

I don’t see the discounts everyone is raving about. Everything is still expensive here in SF Bay Area, and stores are packed.

By: Anonymous

Anonymous — Fri, 07 Nov 2008 08:26:00 +0000

hermes only grew 4%?

gee, the rich must have it tough.

hard times, my friend, hard times.

By: Smith

Smith — Fri, 07 Nov 2008 06:06:00 +0000

“Sales at Neiman Marcus, the luxury department store, dropped nearly 28 percent in October.”

Even with Sarah Palin’s spending spree!?!?