The holiday shopping outlook just got even grimmer.
From discounters like Wal-Mart to luxury emporiums like Nordstrom, the nation’s big retail chains reported a second month of weak sales growth this morning, blaming economic clouds that show no signs of lifting before the end of the year.
Sales rose just 1.9 percent in October, below industry estimates, according to Retail Metrics, a research firm, which said 70 percent of the retailers it tracks fell below their forecasts.
The poor results for October — which followed a dismal September — suggest that this will be a tough season for retailers and a deeply-discounted one for consumers.
Wal-Mart Stores, the nation’s largest retailer and a bellwether for the industry, said sales at stores open at least a year rose a meager 0.4 percent last month, even after the company lowered prices on toys and electronics to drum up business.
Even more worrisome: Wal-Mart predicted sales growth could be flat for November.
Mid-priced department stores did not fare much better. Sales fell 1.8 percent at J.C. Penney and 3.8 percent at Kohl’s.
Even higher-end stores struggled. Sales fell 1.5 percent at Macy’s and 2.4 percent at Nordstrom.
“The carnage was worst in the department store industry,” said Ken Perkins, the president of Retail Metrics.
We have seen consumer spending slow down in September, and now we're seeing poor retail sales results from the big box department stores in October. Retailers are going to have to start slashing prices on their products, just to get their inventory off their store shelves before Christmas. And the reasons for the consumer slowdown in spending are pretty much obvious--increasing oil and gas prices, higher food prices, higher mortgage payments due to increase in adjustable-rate mortgages, fears of slowing economy, a potential U.S. recession, and job layoffs. With all these economic worries, is it no wonder that consumers are going to cut back on their spending?
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