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June Retail Sales Suck


Hello…Is Anyone There?

“Rise in retail sales points to healthy consumer”. That was the headline of a Reuters article on March 13, 2012. The article goes on to say, “U.S. retail sales posted their largest gain in five months in February, with Americans feeling confident enough to buy more cars and other goods even as they paid more for gasoline.”

Turns out the headline was not only an incomplete sentence…the entire article was also a poor assessment of the fragile consumer outlook towards retail.

Yesterday it was announced that U.S. retail sales fell in June for the third straight month as consumers cut spending on most goods and services, reflecting a sharp slowdown in economic growth in the second quarter. The last time the U.S. experienced three straight monthly drops in retail spending was in the second half of 2008 – which, of course, our President will remind us he inherited.

And while analyst’s and politicians can’t seem to get a handle on it, retail’s fragility is no surprise for consumers and retailers in the trenches.

From the consumer’s perspective with no end in sight to current economic suckage and little to get excited about in the stores – it’s just easier to not shop. In fact consumers are learning, albeit reluctantly, they don’t need to wander aimlessly through the stores at the mall to find happiness.

On the other hand retailers are culprits in this situation as well. Poor retailing strategies by merchants across the board are training consumers to not shop. If sales “events” and markdowns are the extent of a retailers tactics, well, they’ve got trouble. My post yesterday, “If It’s The Same, Only Price Matters” had traction with many readers. Unfortunately it is a telling assessment of today’s retail state.

Until retailers up their game and economic news gives consumers (not just the media) something to get excited about the next several months are likely to be the same. And that’s not good.

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