Foreclosures Have Cured Many From the Addiction of Shopping
July 8th, 2009
Foreclosures have cured many from the addiction of shopping and there are hardly any ‘shopaholics’ spending idle time with bulging shopping bags.
In March the sales in same-stores fell for the sixth running month as consumers remained cautious about buying anything but the bare necessities like food. But some optimistic signs are beginning to surface.
The shops had been hopeful of a pick up in Easter sales but were disappointed. Discounts were strong – much more offered in comparison to other sectors of the economy. The luxury market continued to limp as shoppers sniffed around for bargain deals. The retailers have been drastically cutting costs and inventory in a desperate move to improve the scene dominated by weak consumer buying.
The pundits of economy are huddled closely watching the sway of the market because it is the ordinary shopping that is accountable for 70% of the economic activity of the country. Any sign of improvement can be taken to be the harbinger of good tidings that the winter of recession is starting to be over.
In the latter half of the 2008 the mood of the economy was one of sharp contraction mainly because consumer spending fell in the fourth quarter by 4.3%. Since the last 28 years the country has not seen such a drop.
The latest figures coming in are showing mixed results. March is relatively a weak month. As yet it cannot be said if stabilization has started to operate. The key is to watch the performance of same-store sales. Discount sales continued to be higher than the non-discounted ones.
The most popular selling items are groceries, health stuff and accessories. With massive job cuts and frozen credit the people do not have much choice but to be cautious.
The jobless claims fell, according to the Labour Department from 674,000 to 654,000 in one week. But nevertheless the claims continue to be substantial. It was the 11th running week of people continuing to get unemployment insurance.
The sales in Wal Mart (world’s biggest retail organization) increased by 1.4%. Sale of fuel has not been included. Eduardo Castro-Wright of Wal Mart Stores said, “Based on the initial strength of our sales this week, we expect Easter to drive April sales performance.”
Target Stores said the sales in its same-store fell 6.3% – this being less than what had been apprehended. So perhaps the tide is receding and the clouds clearing.
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July 20th, 2009 at 9:22 am
[...] American economy is in the grip of a deep recession. Unemployment is at its peak and foreclosures have become common. The crisis has become so deep-rooted that even condominiums have not been [...]