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Thursday, December 27, 2012

Speaking Frank on Holiday Sales

Its' early Thursday morning.. we're back..  We hope everyone had a lovely Christmas holiday..  And now let's peruse the news...

More fiscal cliff nonsense... Will they?  Won't they?

Next..

Some articles on how overall holiday sales have been the worst since the 2008 crisis...  Gotta admit we're a little surprised it was admitted publicly... this is usually the type of news that has a positive twist or which you don't hear about until mid January at earliest..

Gee, we wonder why sales have been so poor?

Hurricane Sandy?   No..  It was terrible and it hit some communities unmercilessly but it was also two full months ago.. so that's a 'No'

Black Friday starting on Thanksgiving evening?   No  It was a poor idea and utterly inconsiderate to anyone who worked for those stores but that really didn't affect overall shopping numbers because statistics compiled based on overall sales and credit card usage isn't based on December alone-- it took Thanksgiving into account..  and Halloween too.
"Holiday-related sales rose 0.7 percent from Oct. 28 through Dec. 24, as compared to last year, according to data from Mastercard Advisors SpendingPulse. That was the lowest growth rate for that period since 2008, at the depths of the recession. " (NBC News)

And why does Wall St care?  It wants everyone spending as much as humanly possible to pump up the quarterly dividends of companies they're actively invested in, which translates to greater profit for them.

So why were sales so low?   People tapped out of cash?  People finally feeling the economic effects of long-term unemployment?  Fear of that pretend 'cliff'?

Possibly...  Maybe... and Doubt it....

We think it was very simple-- the sales were utter crap and people finally caught on to the tricks.

Back in 2008 after the market crashed and such, people were fearful to shop.. Didn't feel comfortable for the future and such really didn't shop in droves.  The department stores and other major retailers were desperate to get rid of inventory so you the consumer saw some genuinely good sales across the board--clothing to electronics to automobiles...
In 2009, these merchants were pissed off and determined to never let their profits be cut into this dramatically again... They had to re-condition the consumer to not expect or look for the sale...

So they drastically cut back quantities especially on higher-end ticket items.  'You want to buy X?  We'll we only have 2 in stock in this color/size so when its gone, its gone'...  and people got "played" by the merchants and basically gobbled this manipulation up..

In addition, at lower end stores, no longer were they going to wait until the 26th to mark merchandise 50% off... They were going to create phony faux sales... 40-50% off sales in early November.. and Black Friday.. and all of December..   just recycle the sales...  Macy's is pro at this...

What do we mean?  Example.. a black sweater retails at $140 so Macys will have a sale --40% off then add some "special" coupons to lower the price to say $65...   This "sale" will be offered on Halloween.. Veterans Day.. pre-Thanksgiving, Black Friday, early-mid December, etc... you get the picture...

So for every 14 days that sweater is available for purchase, perhaps 8 to 10 of them will be "sales"... the exact Same sale... And Only after these 8-10 pretend sales do not move the merchandise, will a store like Macy's perhaps add an extra 10% off
Then you had stores like Kohl's that issue 20% coupons literally every single day in one's email box which add up to 52 "sales" a year...  Trust us.. if you're eternally getting 20% off, that item is eternally inflated by 20%

And so between 2009 -2011, people bought into all this nonsense... And suddenly whether it be people running out of disposable income, feeling depressed by the state of things or just tired of the same bullshit tricks and games, overall people cut back on their spending and decided to wait for "real" sales...

Whether they get them in late December or January.. who knows..  retail stores can be stubborn bastards..  For instance one of our staff visited Target the day after Christmas.. it seems the wrapping paper and bows, etc were 50% off but the holiday candy was only 33% off...

Target stingily wanted to hold on to that 17% price differential as long as possible...  Certainly many people bought holiday chocolates at that discounted price making Target look smart... but then again the store was visited in late afternoon and was told there was "A LOT" of chocolate left considering most other holiday fare at 50% were completely gone.
Not to pick on Target but it made us think... last year on Black Friday, they sold iTunes cards at 20% off which is overall a good sale.  This Black Friday, they sold iTunes 4-packs normally $60 for $50 which works to a discount of 16.7% off.

Miserliness can be a subtle thing.

Holiday sales overall tend to be fake.  For instance, for all the hype and hoopla about "fantastic" Black Friday and Christmas sales on HDTVs, do you know when the best sales of the year Really take place??

Yes-- the week or two right before the Super Bowl.
Do you know when the best prices for laptops and non-Apple tables are offered?  Hint.. its not Black Friday or Christmas...

Yes-- Its the couple weeks in mid-late August before kids go back to school.

Any pay full price for calendars on Dec 24th when they'll be 33-50% off on Dec 25th and 75% off by January 21st?

We hope that stores will learn some lessons and next year offer better and more sincere savings & value to customers or make Black Friday something worthy to stand outside in the cold for...

But we doubt it...