Retail sales rise, but Americans just want basics
American are buying again. But what they're buying is changing. Instead of the impulse purchase and a taste for luxury, they're buying only what they need.
"The consumer out there is in what I call a retail deep freeze, where they're not spending any money unless they have to," he said in a telephone interview.
Upbeat sales figures
His view seems at odds with the upbeat news reports Thursday about retail sales. "Kohl’s Corp., BJ’s Wholesale Club Inc. and other US retailers said first-quarter preliminary earnings exceeded their forecasts after April sales signaled shoppers are returning to stores," Bloomberg reported.
Other news reports were more skeptical, pointing out that Easter came early this year, skewing the numbers. Combining March-April same-store sales, April's totals dipped 0.3 percent compared with a 1.3% gain for the same combined periods last year, CNNMoney.com quoted Thomson Financial's retail analyst Jharonne Martis as saying.
Looking deeper into the numbers, Mr. Beemer also sees trouble. Wal-Mart, which reported a better-than-expected 5 percent increase in same-store sales, is merely capturing a greater share of the consumer dollar, he said.
For example, overall sales last month rose 1.2 percent, according to Thomson Reuters' revenue-weighted same-store sales index. But excluding Wal-Mart, they fell 2.7 percent.
Less mall traffic
Discount shopping is in, discretionary spending is out, Beemer said. A year ago, 20 percent of shoppers said they bought apparel in a mall; now, that figure is 8 percent. Shopping levels at mall-based home-accessory stores and jewelry stores have plunged by half, according to his surveys. But garage sales and flea markets have seen increases in shopping levels.
"We're in a new era of frugality," he said.
Consumers are pressured by credit-card debt, concerned about the impact of federal deficit-spending on future economic growth, and making efforts to save to make up for losses in the stock market crash. "We're going to be in this cycle for a long time," he said.
Retail sales won't pick up in any sustainable fashion, he predicts, until Labor Day 2010.