December Retail Sales – Bad!
A couple of weeks ago I pondered the question as to whether the stores did that badly in anticipation of my hope that, because of what it looked like locally at the malls, that maybe retail stores would have done better than what people were projecting.
Instead, it seems that the December sales figures show a decline of 2.7% across the board, the sixth month in a row where retail sales declined, and .1% lower than last year, which wasn’t a good season at all. It’s being said that this is the worst holiday retail season since 1969. And the fallout from such bad news is upon us.
Earlier today, Nortel, the giant telecommunications company that, at one point, was the largest company in Canada, filed for bankruptcy today in the United States, and will be following suit in Canada and Europe. At one point, Nortel’s stock used to trade at $860 a share, only as far back as 2006, and today it was trading at 32 cents a share; ouch! The department store chain Gottschalks also filed for bankruptcy today, and drug store chain Walgreens stated that they’ll be eliminating around 1,000 jobs this year.
So, how bad is it? Check these out:
Falling gasoline prices pushed sales at gas stations down 15.9%;
Stores selling general merchandise saw their sales fall 1.3%, including a 2.3% decrease at department stores, the biggest drop in nearly five years;
Sales at clothing stores plunged 2.5%, while sales at sporting goods and other stores catering to leisure-time activities fell 0.4%;
Sales at auto dealers fell 0.7%, putting the drop for 2008 at 22.4%;
Sales at furniture stores dropped 1.8%;
Sales at hardware and garden stores fell 2.9%;
Sales at electronics and appliance stores fell 1%;
Sales at food and beverage stores fell 1.4%;
Sales at restaurants and bars fell 2.2%, the biggest drop since September 2001;
Sales at health and personal care stores rose 0.4%;
Sales at nonstore outlets, such as catalogs and online stores, fell 1.9%.
Some more specific takes for the month include these:
Earnings for all companies in the S&P 500 probably fell 20 percent in the fourth quarter of 2008;
GE lost 83 cents, or 5.6%, to $14.11;
Macy’s tumbled 5.8% to $9.47;
American Express fell 6.1% to $17.83;
J.C. Penney Co. fell $1.54, or 7.6%, to $18.76;
Abercrombie & Fitch Co. lost $1.30, or 6.3%, to $19.48;
Citigroup slid $1.37, or 23%, to $4.53;
Principal Financial Group Inc. fell 11% to $16.94;
Lincoln National Corp. dropped 10% to $18;
H.J. Heinz Co. slipped 3.5% to $35.14;
Blackstone Group LP, the world’s biggest private-equity firm, fell 7.4% to $5.67;
Archer Daniels Midland Co., the world’s largest grain processor, dropped $3.63, 13%, to $24.25;
Allergan Inc., the company that invented Botox, gained $1.43, or 3.6%, to $41.01. Indeed, being in the health or vanity business is a good thing for America.
This whole thing, frankly, is scarier than I was expecting it to be, and leaves me with this one big question: will $800 billion dollars be enough for President-elect Obama to help turn things around, especially if he sticks with his proposed tax cut? I guess we’ll all have to wait and see.