10:33 p.m.
The big news was that retail sales were up 4-5% from Black Friday 2006, but the deep dark lining around that silver cloud is that retailers slashed prices far more aggressively this year than last, and that shoppers lined up to get at those bargains because they have less money to spend this year than previously.
Holiday Sales Fail to Meet Forecasts With Discounts in Demand
“U.S. retailers, offering holiday discounts of 50 percent or more this week, may see profits erode even as customers flock to stores . . . Wal-Mart Stores Inc. will mark down toys and TVs online through this week, while Kohl’s Corp., the fourth-biggest U.S. department store, sold jewelry at 60 percent off during the first days of the holiday shopping season . . . More than two-thirds of online retailers surveyed by the Washington-based NRF offered Internet discounts or free shipping to entice consumers. Barnes & Noble Inc. was selling books for as much as 40 percent off, while Circuit City sold digital cameras for 30 percent less.”
Yeah, sure, retail sales were up, but how about profits? Slashing prices 50%-60% in the first day of the Christmas shopping season smells like an act of desperation to me, though it seems a couple of dimwitted pundits have invented a creative narrative to fit their new spin suits:
ED MORRISSEY WONDERS WHY THE GOOD NEWS ABOUT RETAIL SALES is being ignored
“As a presidential election draws near, the opposition party inevitably begins talking about how poor the economy has begun. This election has seen an early start to this kind of talk, recalling the 2004 rhetoric about how the rebounding US economy then resembled the Great Depression — laughable in retrospect and educational in review. It appears that Christmas shoppers have both laughed and learned this weekend as well.”
Translation: “Psst, it’s a political conspiracy cooked up by the Democratic media to make Republicans look bad, pass it on!”
You know, maybe the “good news” about retail sales is being “ignored” because when you take a closer look at the numbers, it isn’t really good news — more shoppers waiting in line for hours in the cold just for the opportunity to rush at deeply discounted merchandise does not inspire optimism from sane analysts. But what did I expect? These are the same people who look at a rapidly depreciating dollar and crow about how great it is for exports . . .
