Black Christmas

14 November 2008 By Martin Hutchinson

Best Buy results and September retail sales figures show US consumers in full retreat. A Christmas season decline in nominal dollar sales the first since records began is a real possibility. That would threaten many retailers fullyear profitability.

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Retail sales in the first nine months of 2008 were $3.38 trillion, 32% of gross domestic product, up 2.5% from 2007. In September 2008, retail sales were down 1% from September 2007; the consumer price index for September was up 4.9% for the previous year.

Retail sales for December, the most important month of the Christmas period, have never decreased on a nominal basis from the previous year since statistics began in 1953. In 2007, December retail sales were up 4.1% from 2006, flat in real terms. In the 200001 recession, the worst December was 2000, up 3.4% from the previous year (and flat in real terms.) In 1990, December retail sales were up 3.6% (down 2.7% in real terms). In 1981, retail sales were up 4.9%, down 4% in real terms, in 1980 they were up 5%, down 7.4% in real terms and in 1979 they were up 9%, down 4.3% in real terms – the only two or three year real sales decline.

Best Buy reported November 12 that samestore sales dropped 7.6% in October after a 2.4% drop in September. It estimates that sales for the remaining four months of its fiscal year, November through February, could drop 515%.

WalMart's same store sales rose 2.4% in October from 2007.

Black Christmas

13 November 2008 By Martin Hutchinson

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