According to the National Retail Federation, retail sales over the Thanksgiving holiday weekend were $41.2 billion, up slightly from a year ago, while about 195 million consumers shopped, up from 172 million last year.
Meanwhile, Coremetrics says the average online shopper spent 35% more on Black Friday vs. a year ago, while robust sales were predicted for Cyber Monday.
Against that backdrop, you might expect Howard Davidowitz of Davidowitz & Associates to backtrack from some of the bearishness he’s professed on Tech Ticker (and elsewhere) in the past year. But you’d be wrong.
“The consumer is in worse shape since I was here last” in August, Davidowitz says, citing the following:
- Unemployment has exploded: “We’ve lost a ton of jobs since I was here last,” Davidowitz says, noting the “real” unemployment rate is 17.5%. “That’s an astounding number.”
- Housing continues to sink: “The consumers’ biggest asset is down trillions” in value while “foreclosures are exploding” and a huge percentage have negative equity — 23% according to CoreLogic.
- Record numbers of consumer bankruptcies: The American consumer has “never been further behind…never defaulted more” on mortgages, student loans, auto loans, and credit card bills, he says.
- Poverty on the Rise: One in eight Americans and one in four children are receiving food stamps, as The NYT reported this weekend.
“A lot of people were out on Black Friday — you’re always going to spend some money because it’s Christmas,” he says. “[But] the consumer continues to get dramatically worse.”
Davidowitz predicts “the noise will be taken out” about “strong” Black Friday sales in the coming weeks and a sobering reality will settle in: “People will look a stores closing and a rash of bankruptcies after Christmas. People will start to look at this and say ‘wow, this is terrible,'” he says.
Posted Dec 01, 2009 07:30am EST
by Aaron Task
Source: Yahoo Finance