As my Money & Markets article was getting sent to you, the total retail sales numbers for June were getting released. And if you look at just the headline … they rose a better-than-expected 0.6%.
What gives? Didn’t I say same-store sales stunk in June?
Yes.
The retail sales numbers released today include items like gasoline and automobiles, both of which had relatively strong showings in June. (The former because of a price spike, the latter because of pity and strong incentives.)
However, if you strip out autos, sales were up only 0.3% vs. economist expectations of 0.5%. And sales at the nation’s general merchandise stores were DOWN 0.4%.
Separately, a report from the National Retail Federation says the average family plans on spending 8% less during the back-to-school season this year compared with 2008.
Bottom line: I’m sticking to my guns on the retailers. It’s gonna be slow going for a while.
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{ 9 comments… read them below or add one }
Dear Nilus,
You may have missed something if you don’t shop on a routine basis. If you look at the retail stores, there ARE tell-tale signs. They used to be stocked so tight with goods a shopper could hardly navigate a buggy around, now suddenly the aisles have become spacious. That tells me the stores are carrying LESS inventory which means they are tightening up, experiencing LESS sales. It is quite a marked difference around here. It’s very noticeable even to someone like me who doesn’t enjoy shopping!
~Cyberwing
Nilus Mattive Reply:
July 14th, 2009 at 9:45 AM
Good point! You’re right … I really don’t do much shopping at all … and when I do, it often happens online where prices are better and impulses are kept in check!
Thanks for what analysts like to call a “channel check” …
I am a Costco shopper. I go every 6 weeks and have for over 5 years.
As Costco shrunk case/box sizes and increased prices, they would call their increases in same store sales (until recently). Amazingly their increases in “sales” were always less than the price increases on core items.
Costco raised many, many prices in April, May & June. Many of the things I buy every 6 or 12 weeks have increased over 20% (more if you include the package shrinkage) since last year.
The year over year sales are totally bogus UNLESS you include price increases.
I believe if companies tracked number of widgets vs. sales price of said widgets, things would not be quite as rosy as the powers that be want us to believe.
The Ministry of Truth is hard at work again spinning their propaganda. They figured most people forgot what was released last week on same-story sales, and they’d probably be right. But some of us are paying attention. I agree with you: The stores and restaurants here aren’t anywhere nearly as busy as they were a couple of years ago. I don’t buy anything the mainstream media says.
Nilus,
I love your comments about the “weather” excuses. The only “radar” to look at is what the consumers are doing.
Here’s more from the survey used by the National Retail Federation
http://www.bigresearch.com/news/EBJul09.htm
Phil Rist
BIGresearch
hey Nilus,
in your next Superstar monthly letter would you address whether your portfolio holdings are appropriate for IRA or non-IRA accounts, and the US tax implications of dividends and MLPs. Also, why does the shipping industry pays large dividends, such as DRYS, TGP, DAC, DSX, etc. and are any of these, or the ETF SEA, worth including in a portfolio?
Nilus Mattive Reply:
July 17th, 2009 at 3:03 PM
Hi, James. I’m currently working on the issue right now, and I don’t know if I will have room to answer all those question in THIS one.
However, assuming you’re a subscriber, you should have access to all my past issues on the website and many of your answers are in those issues.
For example, I did an MLP story in the October 2007 issue … it covers much of the tax implications to those investments.
I also recently did a Money & Markets column that talked about general dividend and tax issues, including a brief section on MLPs. It’s located here.
Regarding how appropriate my recommendations are for IRAs … I would say very, other than the MLPs.
The short answer on shippers is that I was recommending FRO at one point, but have not advised purchase in quite a long time. I promise to take a fresh look at the industry — and potential investments — in greater detail in a future issue.
I agree that retail may be a problem. I can tell you my local Wal-Mart has definitely cut inventory as another poster mentioned many stores are carrying less things. Sales are also down around 5% for the month of June which the trend has been 3-5% for most Wal-Mart’s. However this past week sales have fallen once again and is down about 13-14% for the week. It will be interesting if this double digit trend continues. Sounds to me like people are plain flat broke!
Nilus Mattive Reply:
July 28th, 2009 at 12:53 PM
I think so, Jay. And as I just posted on my Twitter account, consumer confidence fell again in July … far more than economists expected.
It seems as though people are more worried about their OWN situations — particularly when it comes to employment — than they are about a rise in the stock market or a couple of “green shoot” data points. And I don’t blame them!