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Wary Consumers Spell Trouble for Retailers

71% miss projections, worst showing since September of 2000

By Harry Kimball,  Newser Staff

Posted Oct 9, 2008 4:42 PM CDT
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(Newser) – With the holiday season looming, retailers' only hope may be a genuine Christmas miracle. In reports on last month's business, 71% of retailers missed sales and profits estimates, making it the worst September since data collection began in 2000, MarketWatch reports. Experts widely attributed the dismal numbers to the struggling economy and a dearth of credit, while some stores blamed disastrous weather for low traffic. Only value and off-label stores beat expectations.

“The recent disruptions in the credit and financial markets have had a negative impact on the consumer,” one executive said, explaining his firm’s poor performance. An analyst was clearer: “Consumers are bracing for recession,” he said. The deteriorating economic situation bodes ill for holiday sales, which make up nearly one-fifth of annual totals, the Washington Post reports.

Target reported less-than-stellar sales, thanks in part to shoppers defaulting on store credit cards.
Target reported less-than-stellar sales, thanks in part to shoppers defaulting on store credit cards.   (AP Photo)
Shoppers walk inside a large mall in San Jose, Calif.
Shoppers walk inside a large mall in San Jose, Calif.   (AP Photo)
Shoppers carry bags at a mall. Traffic and sales diverged sharply from retailers' estimates for September.
Shoppers carry bags at a mall. Traffic and sales diverged sharply from retailers' estimates for September.   (AP Photo)
If retailers can't move product, sales might be in order.
If retailers can't move product, sales might be in order.   (AP Photo)
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The US isn't alone: sales also fall in Europe
Bloomberg

Unsurprisingly, consumer confidence is falling
Reuters

 
consumer confidence • recession • consumer spending • credit crisis • retail sales • clothing • retail businesses • September

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