The retailers are anticipating a solid holiday shopping season and yet they are aggressively marking down their prices well in advance. Interesting. We just got the Conference Board's annual survey and it showed that U.S. households [expect to spend] an average of just $384 on gifts this year, which is less than the $390 spent in 2009. Lynn Franco, the Conference Board's director, said "Consumers are approaching the holiday season in a somewhat cautious mood."
This year, Rosenberg notes, retailers added some 40,000 people to their staffs; last year they cut more than 100,000. What will that mean for profit margins when retail companies announce their results early next year?
An update from economist Dennis Gartman of The Gartman Letter:
It appeared from GPS satellite imagery of shopping centers around the country that there were far more cars in the nation's parking lots than there were a year ago, obviously leading us to believe that the shopping numbers would be up as sharply. However, the first hard data from sources such as ShopperTrak would suggest that the sums spent this year are barely above those of a year ago. ShopperTrak has spending up 0.3% from a year ago, with the group blaming heaving discounting by retail shops.
Online sales are obviously a factor; although early reports have online sales at 12 percent to 16 percent higher than last year, Gartman writes, it's too early to know how it will all shake out.
Pass me another eggnog.