Comments On The WSJ August Retail Sales

The Headline Reads: Retailers Report Weak Sales For August (Click For The Story) Then highlight is:

“Industrywide, same-store sales fell for a 12th straight month — highlighting the woes retailers have been under as consumer spending continues to decline.”

Then there is discussion as to what will happen this holiday season as well as the impact of the clunker program. This is followed by reports of what key public companies in the retail industry reported. Remember there is a lot that is not reported. Also remember, economic recovery is driven by consumer spending and there is little evidence that is strengthening.

The point made that I commented on was that going forward the monthly same store comparisons will look better because you are comparing against increasingly weak numbers from last year as retailers tanked in the fall of 2008. Here is what I wrote:

The comparison may show less dramatic declines and even a greater number of positive percentages when current year sales are compared against months last year when retailers began to experience sharp declines. Those may be feel good metrics. However, the key is what are the volumes and margins that are planned in connection with an acceptable profit plan and how are actual revenue and profits doing against that?

Typically that information is a bit more difficult to extract. The well run retailers have a profit plan by location that is based on category proformas. The key is to be profitable at each location and in each category within that location. I still see very little advancement in the use of direct response marketing and social media marketing. Tools and technology that have been readily available and proven to work for quite some time.

There is a lot of the “same ol same ol” and that is not going to work in an economic climate likely to be very soft for quite awhile.

Steve Pohlit

Author: Steve Pohlit

Independent BEMER Distributor
Real Estate Investor
Business and Real Estate Coach, Consultant
Professional Speaker, Author

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