Hound Notes: This is what happens when you destroy the middle class and thus the market place.
RETAIL DEATH RATTLE GROWS LOUDER - The Burning Platform - May 25, 2014
Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:
Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%
Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%
Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%
JC Penney Thrilled With Loss of Only $358 Million For the Quarter
Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%
Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%
Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores
Gap Income Drops 22% as Same Store Sales Fall
American Eagle Profits Tumble 86%, Will Close 150 Stores
Aeropostale Losses $77 Million as Sales Collapse by 12%
Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%
Macy’s Profit Flat as Comparable Store Sales decline by 1.4%
Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%
Urban Outfitters Earnings Collapse by 20% as Sales Stagnate
McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%
Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster
TJX Misses Earnings Expectations as Sales & Earnings Flat
Dick’s Misses Earnings Expectations as Golf Store Sales Plummet
Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%
Lowes Misses Earnings Expectations as Customer Traffic was Flat
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Tuesday, May 27, 2014
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3 comments:
Although this is perhaps seen as bad news, the question is where are people spending their money and are they spending in more responsible ways? And does this symbolize a decline in rampant consumerism and materialism among our citizens. There are other ways to grow an economy than the mindset that we have to buy cheap consumer products that are soon planned to be obsolete. What about the arts and local entrainment, investments in better infrastructure, better communities, sustainable energy, etc. Assuming that more of what we have is what we need is a question that always needs to be asked. And in the end, who benefits from our run away consumerism? And to what end is it all focused for a better community, a better economy.
Mr. Garrard,
You make legitimate points about a shift of economic forces and priorities, much of which is created by shifting demographics caused by an aging populous and the realities of the law of diminishing returns based upon the economic boom created by the petroleum economy.
The issue is that we are not shifting efficiently into other realities. We aren't only seeing an end of "Consumerism", we are seeing a seizing of the marketplace. There is no velocity to the marketplace. No velocity equals money, goods, and services not being exchanged equals people not having occupations, careers, or having money to spend and/or sustain themselves.
Chicken or the egg... Is this great pullback caused by changing mindsets and priorities or are the changing mindsets caused by the shrinking economic and income opportunities?
When you speak about the arts, local entertainment, investments in better infrastructure, better communities, sustainable energy... you still have to have people have money or something of value to exchange to be able to purchase (and consume) those products, because in the end they are products also. In the end that is the marketplace.
In my opinion, the problem is not consumerism, but globalism that has stunted growth by allowing an Oligarchical economic structure to consolidate wealth (and political power) into the hands of a very few. These people have seized, and are destroying, the marketplace... and they know exactly what they are doing.
Basically they are playing a game of Monopoly and we are going to be their willing victims, if we don't stand up to what they are doing. The marketplace can take care of itself, shift realities, if it is allowed to do so.
This is not happening because the consumer has changed his/her mind about consumption and is spending and saving elsewhere. Wages are stagnant, costs for essentials like food, healthcare, utilities and such are up and net worth for most people is not sufficient to live better or save for retirement.
I agree with the statements about materialism and consumerism and cheap disposable junk, but this is largely what is selling for many (many of the wealthiest are actually enjoying rising standards of living and are spending differently). The mindset among many is buy cheap today, even if it's really not a long term value, and worry about tomorrow tomorrow. Buying quality stuff, like clean energy, which may be better but it's more expensive, is the type of decision made by people with enough wealth to choose the pricier option and get the nice benefits. The broke get cheap, poor food, clothes that will wear out faster, and cheap energy and forget about the environment.
As Isaac Asimov once said, the answer to the problems caused by technology is always more technology and (my quote), it costs.
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