Thursday, March 05, 2009

Retailers had miserable February. This low-key approach may not be enough.

Asking your customers to stop in and see what's new may not be enough these days. February was another disaster area for the nation's retailers. There was one bright spot.
We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending towards discretionary categories.
That's according to a spokesman for Wal-Mart, but the good fortune only seemed to apply to them. Their same store sales were up 5.1 percent over the year before.

Overall, retail sales were up 0.7 percent over the year before. But more significantly for most retailers, retail sales for February were down 4.1% if you exclude Wal-Mart. So Wal-Mart's success doesn't seem to be a measure of retailing's strength so much as the brute financial clout of the nation's leading retailer, which has pricing power and distribution efficiencies no other retailer can match. Good news for Wal-Mart is not necessarily good news for Main Street.

1 comment:

Rich said...

Good point here. I'm reminded of the song I owe my soul to the company store.