Black Friday: Nightmare On Mall Street

[Oyate]

Well enough indicators are in to see that Black Friday was a disaster for retailers. Forget about ShopTrends data. We're talking DIS-AS-TER.

This means the mid-season restock won't happen. Typically retailers looked to see what was selling, where their best margins were and they'd to a restock right about NOW to keep selling hot items. Well that ain't gonna happen. They will try to reduce existing inventory now. And anyone looking to find retail jobs will have a particularly hard time this post-holiday season.

This means manufacturers all just got some bad news. And suppliers of raw materials. And all the people that work for them. Many of whom live in Asia. Factories have literally been kept full of cheap labor hoping to work around the clock rushing to fill orders but they are all being sent home now.

But this is going to put more pressure on commercial real estate. Actually, it's gonna be a death blow. That sector is hanging on by a thread as it is. And this is what you are going to be hearing about for the next 6 months. Commercial real estate implosion time. And guess where that wave splashes?

The banks. And we find the same credit mess there, the whole CDO and securitized debt thing with all the fraud and overvaluation. Guys like Denninger, Mish and Celente are saying this is easily enough to put all the banks under water AGAIN. Which means we get the opportunity to bail them out AGAIN.

Now it's not like we didn't see this coming and it's not a new disaster you have to worry about, it's part of the same one that we're all worried about. But you have to admit, it has a certain slow ballet quality to it, like watching a train wreck in slow motion.

[FSP-Rebel]

The way the media reported made it sound better than last years spending by about .5%. Some were saying that maybe the economy is picking up some steam, of course I don't believe a word of it.

[ramallamamama]

Watch for big mall anchor store space being converted for (secure) habitation.

[angelatc]

Watch for big mall anchor store space being converted for (secure) habitation.

Not possible with local zoning laws.

[ramallamamama]

Not possible with local zoning laws.

Lol.

[Grimnir Wotansvolk]

Aside from the potential for a taxpayer funded bailout, I fail to see what's bad about this. Mindless consumerism does not a healthy economy make.

[Dieseler]

Lol.

Lol indeed.

Look for the ones that are nearest to active train tracks.
:D

[aravoth]

Aside from the potential for a taxpayer funded bailout, I fail to see what's bad about this. Mindless consumerism does not a healthy economy make.

I agree...

I don't want to see people loose jobs and go hungry, but I do agree.

[ramallamamama]

Lol indeed.

Look for the ones that are nearest to active train tracks.

At least it'll put some construction workers back to work...

[Oyate]

The way the media reported made it sound better than last years spending by about .5%. Some were saying that maybe the economy is picking up some steam, of course I don't believe a word of it.

The media is tossing around the shoppertrak figure--that's where the .5 came from. Sorry for the mis-citing of data above, I get these outfits mixed up sometimes. Well, they never mind being a couple WHOLE percentage points off with their reports. Always skewed towards the optimistic side. We'll just see how this shakes out but my call is obviously in. It's a pretty freaking dismal signal to the entire supply chain.

[Chester Copperpot]

i dont know how bad it really was.. I have a friend who works at Macys.. and they were down 9% from last year hour-to-hour.

[Oyate]

i dont know how bad it really was.. I have a friend who works at Macys.. and they were down 9% from last year hour-to-hour.

Wow. Double wow. I fully expect final numbers to show a decline YOY but I don't expect to see -9% across the board. That would be staggering.

This was all easy to predict as credit remains tight for individuals and small business. More people are buying from savings as opposed to credit now than ever before. And that means they are spending less.

The anecdotals are all over the place that people lured in by deep "black friday rush" discounts were disappointed to find stocks run out. And no more inventory is coming in to replace it, sorry, no rain checks. Yup.

One interesting thing is online sales seem to be taking up some of the slack. I'm not sure there are any "winners" in this situation but online sales are capturing more market share overall.

[SL89]

The retailers are reporting better than thought numbers. hmmm. Yet stocks are down. http://www.marketwatch.com/story/us-stocks-face-dubai-black-friday-spillover-2009-11-28?pagenumber=1

[erowe1]

Well enough indicators are in to see that Black Friday was a disaster for retailers. Forget about ShopTrends data. We're talking DIS-AS-TER.

This means the mid-season restock won't happen. Typically retailers looked to see what was selling, where their best margins were and they'd to a restock right about NOW to keep selling hot items. Well that ain't gonna happen. They will try to reduce existing inventory now. And anyone looking to find retail jobs will have a particularly hard time this post-holiday season.

This means manufacturers all just got some bad news. And suppliers of raw materials. And all the people that work for them. Many of whom live in Asia. Factories have literally been kept full of cheap labor hoping to work around the clock rushing to fill orders but they are all being sent home now.

But this is going to put more pressure on commercial real estate. Actually, it's gonna be a death blow. That sector is hanging on by a thread as it is. And this is what you are going to be hearing about for the next 6 months. Commercial real estate implosion time. And guess where that wave splashes?

The banks. And we find the same credit mess there, the whole CDO and securitized debt thing with all the fraud and overvaluation. Guys like Denninger, Mish and Celente are saying this is easily enough to put all the banks under water AGAIN. Which means we get the opportunity to bail them out AGAIN.

Now it's not like we didn't see this coming and it's not a new disaster you have to worry about, it's part of the same one that we're all worried about. But you have to admit, it has a certain slow ballet quality to it, like watching a train wreck in slow motion.

This sounds about right to me. But where are you getting all this?

[devil21]

The Friday and whole weekend numbers are going to be very ugly. The vast majority of on-the-ground reports Ive seen were not good at all. Bad for retailers, staff and less tax revenue for gov't.

EDIT: link contents changed

[malkusm]

The Friday and whole weekend numbers are going to be very ugly. The vast majority of on-the-ground reports Ive seen were not good at all. Bad for retailers, staff and less tax revenue for gov't.

I'm sorry, did you say "bad" and "ugly" ??? ;)

[Pants]

It looked like on Friday retailers had nothing but Good News to report. I went to a black Friday sale, the line was about as long as last year.. But a majority of the crowd cleared out within 15 minutes after the store opened. Normally the carts would run out within 2 minutes after the store opened.. And you couldn't get a cart for at least 45 minutes.. Carts ran out within a few minutes, but there were carts available within 10 minutes. These early reports of the black friday sales exceeding expectations is about like seeing a huge crowd going to a church service and the church expecting huge donations based on attendance. Nobody knows the exact amount of donations until they count the offering plate a few days later.

[Ninja Homer]

I guess Black Friday needs a new name... "Still In The Red Friday"? :)

[ItsTime]

The way the media reported made it sound better than last years spending by about .5%. Some were saying that maybe the economy is picking up some steam, of course I don't believe a word of it.

Think about what that graph of "recovery" would look like. Spending was up 3% last year and only up .5 % this year. Growth slowed 85% of what it was the year before. We are pretty much screwed.

[Pants]

For some reason the Asian stocks are WAY so far in early trading.. Dow Futures are up as well. My guess is Reality didn't yet set in.. Its probably going to take a few days to add up the sales.. And major chain stores will probably hide it under the carpet until they have to report quarterly earnings.


Think about what that graph of "recovery" would look like. Spending was up 3% last year and only up .5 % this year. Growth slowed 85% of what it was the year before. We are pretty much screwed.

[Oyate]

For some reason the Asian stocks are WAY so far in early trading.. Dow Futures are up as well. My guess is Reality didn't yet set in.. Its probably going to take a few days to add up the sales.. And major chain stores will probably hide it under the carpet until they have to report quarterly earnings.

The whole Dubai thing is going to have effect this week. No real idea what it will be but trying to move things into Asia sounds like a really good idea for someone invested in the mideast.

[kathy88]

Aside from the potential for a taxpayer funded bailout, I fail to see what's bad about this. Mindless consumerism does not a healthy economy make.


You said a mouthful.

[noxagol]

Store I work at, a walmart in the st. louis area, did great. Up 17% from last year, if what I hear id correct. A 130 000 dollar increase.

[speciallyblend]

We spent 20 bucks on black friday;) big spenders;)

[Sarge]

There are three further ramifications if the numbers on the sales decrease are correct.

Less sales taxes for the states and therefore compounding their problems.
Less people will be hired this holiday season. They will likely not need additional staff after today for the rest of the holiday shopping.
A significant increase in small businesses closing up by the end of the year or shortly after the first. I am guessing before the end of the year. They will not want to be responsible for the January rent, etc.
Loss of jobs when the small businesses close.

[Oyate]

Ooooooh man! Oh man oh man! Check this out:

http://www.gallup.com/poll/124508/Gallup-Economic-Weekly-Thanksgiving-Week-Disappoints.aspx

"Gallup's Thanksgiving week results tend to confirm fears of a weak holiday sales season as consumer spending was unchanged from the prior week, even though it included Friday and Saturday of the Black Friday weekend. At the same time, Gallup's Economic Confidence Index and its Job Creation Index were essentially unchanged from the prior week. A rather gloomy consumer mood and consumer spending -- trailing last year's financial crisis-depressed comparables by 25%"

25%??????? I had no idea it would be that bad. Yeah, nightmare. Nightmare on Mall Street.

As Sarge points out, this year is the death knell for mom & pop shops. Nightmare on Main Street.

Nightmare city.

[Austrian Econ Disciple]

Ooooooh man! Oh man oh man! Check this out:

http://www.gallup.com/poll/124508/Gallup-Economic-Weekly-Thanksgiving-Week-Disappoints.aspx

"Gallup's Thanksgiving week results tend to confirm fears of a weak holiday sales season as consumer spending was unchanged from the prior week, even though it included Friday and Saturday of the Black Friday weekend. At the same time, Gallup's Economic Confidence Index and its Job Creation Index were essentially unchanged from the prior week. A rather gloomy consumer mood and consumer spending -- trailing last year's financial crisis-depressed comparables by 25%"

25%??????? I had no idea it would be that bad. Yeah, nightmare. Nightmare on Mall Street.

As Sarge points out, this year is the death knell for mom & pop shops. Nightmare on Main Street.

Nightmare city.

This is good. We need to be saving. Yes, this is going to be horrible, but it's the right solution. Though again, I suppose it would be better for those savvy in the markets to use those fiats now to either preserve your wealth and invest in assets and commodities. DO NOT HOLD ON TO YOUR FRN's, but hold just enough to go a few months if need be, nothing longer. The last thing you want to happen is to hold on to those FRN's (more than what is needed to survive a few months), when they become rapidly depreciated.

We don't need those TV's, Cars, electronics. We can't afford it. We need to invest in the higher order's of capital.

[Oyate]

This is good.

No it's not good. It's the bad result of bad policies. The job losses this will result in as it ripples through will be grievous. This is the little guy paying for the big guy's mistakes yet again.

[Austrian Econ Disciple]

No it's not good. It's the bad result of bad policies. The job losses this will result in as it ripples through will be grievous. This is the little guy paying for the big guy's mistakes yet again.

We can't afford to be consumers any more. We have to save! We are losing jobs precisely because we spend and use debt. We don't have the resources.

It's the result of the Federal Reserve.

[beerista]

I know that it's anecdotal and I have no idea how representative this is of the country as a whole, but this (http://www.aspendailynews.com/section/home/137857)was the headline story in the local paper this morning. The number of empty storefronts and restaurants around town is quite noticeable. Seems to me that this is very desirable commercial space and they can't get rid of it... at current prices.
http://www.aspendailynews.com/section/home/137857 (http://www.aspendailynews.com/section/home/137857)

[cheapseats]

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MindOfMo
A'course, Big Bad Bankers will have considered the logical possibility that people will purposefully default on credit cards. I spy perfidy.
about 3 hours ago from web
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MindOfMo
I do not advocate stiffing banks, natch, but one must concede Logic if banks go back into distress over NON-PAYMENT OF CREDIT CARD DEBT.
about 3 hours ago from web
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MindOfMo
Americans berate profligate Government Officials, but Citizen Spenders are roughly a cool trillion dollars in debt. BAD DEBT=TOXIC ASSETS.
about 3 hours ago from web
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MindOfMo
AMERICAN PEOPLE HOODWINKED BY CYBER MONDAY, RUSH TO THEIR COMPUTERS TO SPEND MONEY THEY DON'T HAVE, ON COMMAND OF AN ADVERSARIAL GOVERNMENT.
about 3 hours ago from web
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MindOfMo
Me, I hear from Moms & Pops that PEOPLE ARE USING CREDIT CARDS MORE THAN EVER. Easy to imagine folks needing to or planning to STIFF BANKS.
about 3 hours ago from web
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MindOfMo
The question you have to ask yourselves, punks, is whether people are spending cash or RUNNING UP MORE CREDIT ON CONSPICUOUS CONSUMPTION.
about 3 hours ago from web
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MindOfMo
Government and Retailers announce that worst seems to be behind us, now that millions of Americans dutifully bought unneeded crapola online.
about 3 hours ago from web
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MindOfMo
Simon sez, EVERYONE STAND ON THEIR HEADS. Simon sez, EVERYONE BE SCARED OF SWARTHY BAD BUYS FROM OTHER LANDS. Simon sez, SEND US MORE MONEY.
about 3 hours ago from web
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MindOfMo
Super Saver Sunday. Dollars, not souls.
about 3 hours ago from web
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MindOfMo
SYSTEMATICALLY SENSATIONAL SATURDAY.
about 3 hours ago from web
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MindOfMo
Fabulous Friday.
about 3 hours ago from web
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MindOfMo
Theatrical Thursday.
about 3 hours ago from web
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MindOfMo
Winter Wonderland Wednesday.
about 3 hours ago from web
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MindOfMo
TINSEL TUESDAY.
about 3 hours ago from web
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MindOfMo
QUIT DOING WHATEVER THE FUCK GOVERNMENT TELLS YOU TO DO. IT'S EMBARRASSING. SUGGESTIONS ARE NOT COMMANDS. YET. CYBER MONDAY, GIMME A BREAK.
about 3 hours ago from web
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MindOfMo
AMERICAN PEOPLE HOODWINKED BY CYBER MONDAY, RUSH TO THEIR COMPUTES TO SPEND MONEY THEY DON'T HAVE, ON COMMAND OF AN ADVERSARIAL GOVERNMENT.
about 4 hours ago from web
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[Icymudpuppy]

Please save your money for needs like pest control in your residence. Don't waste it on consumer products.

People saving on junk means they will have more to spend on needs.

Good for my business.

Still Hiring.

[cheapseats]

The other week, some Asshole Expert postulated that high-end and low-end retailers will suffer, that he likes the stocks of the mid-range retailers. EXACTLY ass-backward. Rich/high-end are above the fray + Middle Class now shops low-end >> Mid-range retailers tank. It stands to Reason.

Lying is turbocharged by GRABBING AT STRAWS.

[devil21]

If accurate, that 25% drop in sales YoY according to Gallup is one hell of a black swan waiting to happen. Q4 earnings will be very interesting with Q1 BKs coming en masse. It's going to be one cold ass January.

[dgr]

When you change you economy from production based, to outsourced consumer based, you lose jobs but credit still produces consumers, that also pay for the service industry.

When you depress credit you limit spending.

and WHEN YOU ELEMINIATE JOBS AND CREDIT you eleminiate the consuption economy

when we see the Disney World Christmas numbers and luxery travel numbers , we'll know just how depressed the economy is ,
when it hits the mega holiday spending spree , even the rich are cutting back

[Athan]

Now it's not like we didn't see this coming and it's not a new disaster you have to worry about, it's part of the same one that we're all worried about. But you have to admit, it has a certain slow ballet quality to it, like watching a train wreck in slow motion.

That is a good analogy...

[ramallamamama]

I spoke to a friend that works in the electronics dept. of the Sears in Kaahumanu Shopping center on Maui. He said last Friday's sales were down 8% from last year.