Retail Chill: Consumers Give Stores The Cold Shoulder

Consumer spending slowed to a crawl in January, with retail sales at major chains rising just 0.5% in what was by one measure the month's worst performance in nearly 40 years, according to reports released Thursday.

Evidence of consumer caution came from both ends of the marketplace.

Discounter Wal-Mart Stores Inc. said shoppers held on tight to the gift cards they received over the holidays or used them to buy milk and bread rather than toys or iPods. High-end Saks Inc. said customers shifted more of their spending to "promotional events" -- making purchases when items were specially priced.

Wal-Mart's sales were higher this January than last, though just barely, while Saks saw a 4.1% increase. Sales at Macy's Inc. stores fell so much more than expected -- by 7.1% -- that the company slashed its quarterly profit forecast and also said that as part of a restructuring plan it would eliminate 2,300 jobs. Costco Wholesale Corp., on the other hand, recorded a 7% hike.

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Comments

[ceasenake]

Good!

People buying crap they can't afford gets them into trouble all the time.

From houses to haircuts, people need to live within their means.

[Nova16]

The economic disaster visited upon the country by tax cuts for the wealthy, voodoo economics, trickle down and the ever popular Laffer curve have finally led to our ruin. Does anyone remember When the dolt, Reagan duped the country into exchanging interest rates on credit cards a deduction on federal taxes for a small increase in exemptions. Just think what a boon this would be to retailers and the consuming public to claim interest rates on credit cards as a deduction since 30% is not uncommon as a rate charge on credit cards. Add to this the fees paid to credit card companies and the late payment penalty. Consumers are not going to create more debt and retailers will continue to fail. The majority of Americans are broke. Vote republican at your peril.

[realitytrumpsbull]

When the priznit has no qualms about fraternizing with prince Texaco, and we've read all about the ethics they tend to practice Over There, well...garbage in, garbage out...

[a]

good god huffingtonpost-even the girl in the picture is hot. every woman on huffingtonpost is hot. but i also agree with the sentiment expressed here.

[MetalCanuck]

ITs a big deal if sales drop...not increase. GEEZ.

[PhillyQuaker]

Poor quality clothes 90% of which are made in China turn me off.

[mmckinl]

Retail has expanded geometrically over these last dozen years to capture the debt propelled spending enabled by cheap money and easy credit.

And now all this will have to be rationalized with extreme down sizing of the retail sector taking suppliers, workers and retail real estate down with it.

When all is said and done it will take 10 to 15 years to sort out the mess we are in and that is if we take the required medicine.

[studlyguy]

yes it's called big time inflation in food and gas and and the subcrime in the housing ,credit turmoil,and layoffs every other day ,the future is very GLOOMY,eatting is more important to people,since were giving all those profits to the oil companies from our wallets in over inflated gas prices big time , and subcrime has finally taken it's toll and there are no more legs for this economy to stand on ,they have all been chopped off,so why don't they just admit were in a depression get it over with cause everyone in the real world if it it looks and feels like something then guess what IT IS ,so just say it and were in for years of tough economic times and start fixing what started this and so after years of economic downturn were in at this point and to continue for years ,the American politicians and wall street and banks will maybe finally learn their lesson and not let it happen again but i doubt it big time

[wm1066]

But we must keep up the profit level to cheney's oil friends or the terrorists will have won!
Who cares about durable goods when we need to fund the oil companies!
So retail takes it on the chin. Its not like its going to hurt any 'important people'....
So much for the myth that Republicans are good for the economy.

[Tom95134]

Heyyy.... Just make Bush's tax cuts for the wealthy permanent. That will fix everything.

[drkazmd65]

Well,... it is hard to justify spending money for a new suit, sack of fashionista crap, or dandy new gadget when one needs to eat or pay the mortgage.

Another in the long line (and no doubt continuing line) of iffy or worse consumer reports to come.

I've said it before,... it is going to be an 'interesting' spring and summer folks.

[WIpatriot]

You got that right, doc.