Big Hurt In Store For Retail

After the worst holiday season in five years, Wall Street is bracing for a slew of ugly profit reports from retailers and downbeat forecasts for 2008.

Major chains - from Wal-Mart to Macy's to Gap - will report earnings for the crucial fourth quarter beginning this week. With the housing and credit markets in turmoil, gasoline prices soaring and the job market showing more signs of weakness, the picture won't be pretty.

Home-improvement giants Home Depot and Lowe's will be especially hard-hit, with both expected to post profit declines. Analysts will be listening for cost-cutting plans that could potentially hit jobs and wages, as the housing market stumbles through at least the first half of the year.

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Comments

[abbiehoffmansghost]

Hey retailers--quality stuff sells better during an economic downturn; stop selling crap. Maybe the Buy American bumper stickers of 20 years ago weren't so lame after all.

[mrcontinental]

But quality stuff LAST to long; then what? Disposable is the american way, from cars to people.

Resistance is futile.

[crowdog]

Oh this is just all sooo terrible! Americans might not be able to spend all the money they want on all the crap they've been told to buy! Oh what will our dear Retail Sector do, boo hoo! Its about time we had a real good crash in this country. Its been all PR from fantasyland since Reagan overthrew the republic and its high time the people realize the truth of the matter: more crap doesn't equal happiness and "stuff" ain't where its at. But this country bought the ticket and now has to take the ride. Sorry folks, no getting off this trainwreck. Just remember how this happened and how it feels, because you can bet as soon as things "stabilize" the pimps on Wall Street and in "our" government will be shoveling the same consumerist lies to us again. Cripes its time for a new way of living in this insane country!

[Quadspect]

And who wants to buy clothing that looks like a rag before it's done being dried after its first laundering--- if not sooner while on the hanger and not even tried on yet in the dressing room?

Clothing manufacturers have been relying on "focal points" to sell clothing made with the fewest number of seams, and drawstrings instead of elastic... the "Focal points" are breasts and midriffs instead of well-made, durable and tasteful clothing.

[Quadspect]

No one seems to mention that department stores have been offering, at sky-high prices, merchandise manufactured overseas, that is shoddy, cheap, trashy, chintzy, tacky, gaudy, ugly, tasteless, immodest, jerrybuilt, cheesy, and junky.. Who, in his right mind, is going to spend hard-earned money to look like a
tart or ignoramus?

[aigeanta]

You said it! I completely, totally, unambiguously agree. The quality at Target is exactly the same as the quality at Macy's. If I had the time, I would just make my own clothes! Hmm maybe there's a good business idea in there...ha­ndmade, organic, locally produced!

[aigeanta]

I'm still pissed about Marshall Field's!

"In Chicago, Macy's move into the Marshall Field's building on State Street upset many residents.­[10] Hundreds of protesters gathered under Marshall Field's famous clock the day the name change was implemented and hundreds more gathered once again to mark the one year anniversary of Marshall Field's loss. Each week protesters gather outside Marshall Field's landmark store at 111 North State Street to solicit support for Marshall Field's return and millions of once loyal shoppers are simply shopping elsewhere.­[11] Macy's reported in December 2006 slowed sales in stores that once were Marshall Field's.[1­2] This decline continued into 2007 with Macy's acknowledging that while many former Marshall Field's stores have seen sales fall 7-10% the original State Street store has continued to struggle even more.[13] In November 2007, Macy's announced that it would no longer try to lure angry and upset former Marshall Field's shoppers to their stores and instead would now be trying to lure new customers into the State Street Store. Macy's hopes to do this by adding an FAO Schwarz floor, a wine bar to the Walnut Room, as well as having Martha Stewart decorate the Christmas Tree in the Walnut Room. [14]"

http://en.wikipedia.org/wiki/Macy%27s

[Pippilangstrumpf]

I live in Chicago and I have not been to "Macy's" once.
I used to be a regular shopper at Fields too, the State St. store.
Ahh....the good ol' days.
I will never be able to figure out why people want to mess with tradition. Especially now...thin­gs are seem so turbulent. It's nice to be a part of something that has been around forever.

[olephart]

I'm constantly amazed at the incredible number of retail establishments. Malls, strip shopping, stores of every type carrying merchandise for any want. I don't have any idea of who actually keeps those places in business. If America depended on people like me there would be one Mall for every two million shoppers, it would only be open on weekends and even then it wouldn't be very crowded. I have a decent income, financially I should be a Republican but I keep putting off that lobotomy. When I need something I buy it but I don't see spending as a hobby or a form of entertainment. Truthfully, if told that I could have anything I needed from the Mall free, I'd probably just walk out with a longer belt and a package of underwear. I guess when everyone goes broke and not spending is the in thing that I'll be fashionable.

[aigeanta]

You are awesome. I worship you. I wish more Americans thought like you.

[mrcontinental]

Hope you're buying some precious metal olephart, I'm fairly certain you are because you've danced this dance before, as have I. The rookies will never learn I'm afraid.

[olephart]

I bought my first gold in 1961 for $62 an ounce. I have enough silver to make a decent weight set. My advice has been that if you can lift your safety deposit box, you don't have enough gold. The lady at the bank could not budge my box, the metal attached to the handle bowed outward when I pulled it out.





And I keep the hundred ounce Engelhard bars somewhere else.

[sandiegoconservative]

Just out of curiosity, if there were only a few retail establishments, where would everyone work?

I think it is ridiculous to have the same stores within blocks of each other, as is the case in some areas in my neck of the woods, but they do employ people.

[olephart]

"if there were only a few retail establishments, where would everyone work?"

Perhaps we could make things and sell them to rich Arabs, well paid Europeans and Japanese with HARD currency and to anyone that wanted well made manufactured items instead of Chinese made Wal Mart SHIT.

[heavysole]

Sorry man. There are simply too many stores.

Cities used to have things called "downtowns". There was only one "downtown", it had stores. This is where people shopped. It's time to trim the fat, use the buildings we have that sit empty and get on with things. And for chrissakes, quit building more and more freaking malls!

We have turned into a bunch of idiots who buy the latest thing every six months and make no demands on suppliers as to why shit doesn't last longer than it does. And please don't hand me the old "technology changes too quickly" BS. I'm sick of hearing it.

[Quadspect]

Too bad the excess commercial space can't be turned into homes for the very people put out on the streets by downsizing, outsourcing, insourcing, under-employment,
being sent to Iraq under false pretenses, and other clever tricks of predatory forms of capitalism.

[aigeanta]

I live in SillyCon valley and the other day, while lost in a business/industrial area, every other building was for sale or lease! These are huge facilities, and there was pretty much no reason to build them. I think that if they sit too long, governments should be able to seize and use them for housing community services! Or convert them into affordable housing!

[Nova16]

I just watched 3hrs of "The Fall of Rome". The empire dissolved into chaos because of the greed, corruption, conquest and war, arrogance and incompetence of leadership, the reckless indulgence of the citizens in games and bodily pleasures and the decline of the economy, etc., etc. I am not comparing our current problems at home and abroad with the fate of the Roman Empire but the parallels are strikingly similar. Rome lasted from 753BC to 476AD. America from 1776AD to ??.

[Justinpassing]

Just remember, when things look their most Bleak
Congress is ever at the ready ahhhh yeah.


Why in the hell do we pay those people a salary, and benefits..­.... anyone?? crickets.

[aigeanta]

I say the party is just beginning. I am happy living in a cheap one bedroom apartment and not having anything extra - life is simple and I plan to keep it that way. When we plan a vacation, it's to go camping and enjoy nature while she's still around. I think people will find a lot more happiness in being frugal than they ever did being ostentatious, and it's a lot better for the environment, too. Hopefully we start making things locally again; that will help the REAL economy and reduce carbon emissions at the same time!

[True]

Hear, hear. I predict/hope for a cultural change where fulfilling experiences replace consumption as our cultural "holy grail."

[FrictionSoul]

Yes to making things local again. Boulder has a relocalization effort going on right now. The big corporations' consumer binge has been sustained by cheap oil. Now that those days are gone forever, it's time to go local again, and remember, that money stays in your community!

[mmckinl]

Not to mention the tech stores like Best Buy and Circuit City.

We could all see this coming. People were renting out garage size space at storage companies just to store their crap despite the McMansions they bought!

The party is over. The hangover is upon us. There will be some 'hair of the dog' shopping as old habits die hard. People will be wandering around the malls like lost sheep, wondering what happened to their life as more and more space is boarded and shoppers carry fewer and fewer bags.

[civilbehavior]

This article juxtaposed next to People magazine article that they might pay 6 million (that's with an M) for baby pictures of JLo and hubby.

Does this mean JLo won't be able to buy formula or that little bambino won't get that new hummer on its third birthday?

American have got to get real. They've got to get an education to start with and then use it after that. We have succumbed to the mall mentality.

We wall around in circles like zombies and wait to be told what brand name to buy next.

Stupidity of the masses is what has gotten us here and the corporations want to keep it that way.

Today out on Southern Blvd. there is a chain of humans that have somehow linked themselves together with metal pipes and blocked traffic going in both directions. Been tied up for hours. It is a group of Earth First and Everglades conservationists who are protesting the building of a plant designed to dump 12 million tons of carbon into the atmosphere.

I say more power to the activists. It's pretty damn obvious by the look of the daily reports on HuffPo that someone needs to start taking more radical action to reverse what damage is being done.

What is the last budget by Bush? Anyone know? This is all so out of control I am glad for people who will risk getting arrested to stop this runaway freight train that is being engineered in our name.

[wm1066]

The owners and CEO's of these stores are big Bush supporters, and it boggled my mind they couldn't see that the war industry and the oil companies are taking all our money and we don't have enough money left to buy thier goods.
They couldn't see the trickle down affect.
And the rich are not buying Gap,Target­,Walmart,M­acy's crap.

[Quadspect]

Macys didn't always sell crap. Macys' gobbled up Broadway Department Stores, Bullocks, May Company, Robinson's­...

There's no anti-monopoly regulation any more. No usury laws any more. People are having their food tainted, processed with harmful substances­... the gas prices have skyrocketed because the purpose of the Iraq war was to control the supply of oil to keep the prices high. ---

I just hope the Republicans do not win, and that the Democrats who will be in Congress will have integrity, and reverse the economic, social and cultural harm to our country.

[aigeanta]

I'm still pissed about Marshall Field's!

"In Chicago, Macy's move into the Marshall Field's building on State Street upset many residents.­[10] Hundreds of protesters gathered under Marshall Field's famous clock the day the name change was implemented and hundreds more gathered once again to mark the one year anniversary of Marshall Field's loss. Each week protesters gather outside Marshall Field's landmark store at 111 North State Street to solicit support for Marshall Field's return and millions of once loyal shoppers are simply shopping elsewhere.­[11] Macy's reported in December 2006 slowed sales in stores that once were Marshall Field's.[1­2] This decline continued into 2007 with Macy's acknowledging that while many former Marshall Field's stores have seen sales fall 7-10% the original State Street store has continued to struggle even more.[13] In November 2007, Macy's announced that it would no longer try to lure angry and upset former Marshall Field's shoppers to their stores and instead would now be trying to lure new customers into the State Street Store. Macy's hopes to do this by adding an FAO Schwarz floor, a wine bar to the Walnut Room, as well as having Martha Stewart decorate the Christmas Tree in the Walnut Room. [14]"

http://en.wikipedia.org/wiki/Macy%27s

[ImmanuelGoldstein]

I'm not surprised, by some reckoning HALF of all consumer spending for the past several years has been based on conversion of housing equity into consumption, the old house-as-ATM routine. With that gravy train already pulled into Auschwitz I think retail is going to get a LOT uglier.

[kellygrrrl]

but, man, those war profiteers just keep rolling in the dough. We are kidding ourselves if we think we are still a retail-driven capitalistic economy. We are a War Economy and it's called Coroporatism and Croneyism

[mrcontinental]

The writing has been on the wall for some time now. Eventually you HAVE to take your medicine and america is about to take a LARGE dose. Soon it will be impossible to get any type of loan for any purpose. We are in serious trouble folks.

[whimsicalpig]

mrcontinental:

How right you are, America is in for a big "hurt".

But, unfortunately, those who will be hurt the most are not the perpetrators of this gigantic mess.

That small group at the top of the American Economy will suffer but little for the greed they displayed during the past decade of corporate uber-profits at the expense of the "little guy".

It will be those who weren't even involved in this frenzy of greed that will feel the inflation and downturn in the economy the most.

It will be on the backs of the minimum wage earner, the retiree living on Social Security, etc. They will be most sorely affected by this.

Those in the upper middle class and above will "feel some discomfort". Perhaps they will have to fore go the second or third vacaton home or that extra trip to Aruba (poor Dears) but I don't think they will be choosing between food or heat.

the ostentatious display of wealth should be met with disdain and social ostracism at times like this.

we have, for some time now, championed this culture of "me-first, greed for greed's sake"'

How unchristian of us. Let's hope that the "christians" who led us down this road will be there for us when our needs are great.

[mrcontinental]

You are absolutely right. Let's hope that this will wake up the masses and they will take action to throw out the bankers and incumbents in government. They are all corrupt and MUST go.

[Tom95134]

Why is anyone so surprised? This is exactly what you have been voting for ever since you elected Reagan to the White House (yes, Clinton is just as guilty). This kind of problem doesn't happen overnight.

You cannot piss away money for toys, 2nd and 3rd houses, etc., while all your manufacturing jobs go off-shore. You cannot ignore what is happening to the middle-class of your country unless you want to end up exactly where we are.

Wake up America, it's 1930 again.

[mrcontinental]

Not surprised really Tom, more disappointed than anything. My motto has always been "Trust, but verify" and we have been lacking in the verify department big time and will suffer the consequences in short order.

I believe the bloom is completely gone from the american rose and will NEVER be restored. I'm thinking Weimar republic circa the 1930's for us. Inflation in the 1000% range and possible higher once the world takes our credit card away and the FED printing presses roll 24/7.

[whimsicalpig]

Tom95134:

Does the name Howard Jarvis ring a bell.

A pre-Reagan proto-neocon who decided to shrink California's budget by ballot initiative.

I can not, for the life of me, understand how anyone can think Reagan was a great president.
Even his "claim to fame" of bringing down the soviet empire was bogus.

He just happened to be standing in the oval Office the day the empire collapsed in on itself from the decades of trying to outspend us.

Yet a great part of this country has been manipulated into thinking he was one of our greats.

He just had a great PR firm.

If these redneck, self-righteous middle americans would take a dispassionate look at just how their lives have changed since reagan, they would be horrified at just how much he an dhis kind have contributed to their sorry lot in lofe.

I don't understand how that bunch keeps voting republican

Do they just hate blacks, gays and other minorities that much more than they care about the real american dream?

[ashleybaines]

Our family has been in retail formalwear for 35 years. Christmas is no longer the high season, but the low season. We are fortunate to have avoided the bankruptcies that are devastating independant retailers - we got out of the malls and into destination strip centers - getting our costs under control in - before the big crunch last December.

Our December figures are now so low that it is the worst month of the year, followed by November. Yes, you heard right - November/December are the worst months of the year... because of NET profits, not gross margins.

It costs too much money to compete for those precious gift dollars. Next year we are planning to take our family leave in Dec. YES AGAIN - you heard right. WE plan to close from Dec 20 to Jan 1. and vacation as a family. We can do that in a strip center - no busybodies from mall management telling us to open at 4am - what doofuses.

When you see malls being torn down - remember they committed mass suicide. Independent retailers do a better job anyway. The whole industry is being divided - Specialty vs Discount - with department stores the BIG LOSERS.

[ImmanuelGoldstein]

OVERMALLED NATION

Retail is going to take a BIG hit as the American retail sector is as ridiculously bloated. Take a look at this chart of the comparison of square footage of retail per capita space by country.

USA 20.2
Sweden 3.3
UK 2.5
France 2.3
Italy 1.1

Notice the figure for Italy I guess they must not have many places like the Mall of America in Italy! How did America ever support EIGHT TIMES the retail space of the UK? Obviously our retail sector is headed for a BIG shakeout as the housing ATM scam runs out.

Next trend. People abandoning their storage centers filled with junk as the move out of their McMansions and can't afford the storage rental anymore.