You've got to hand it to Howard Davidowitz. He doesn't pull his punches. Here's MSNBC's take on December sales with quotes from Howard. Also, based on December sales, Wal-Mart has now cut its outlook.
“Discretionary spending is DOA — dead on arrival,” declared Howard Davidowitz, chairman of retail-consulting and investment-banking firm Davidowitz & Associates.“You've got consumers with 101(k)s instead of 401(k)s. Exploding unemployment. Consumer bankruptcies exploding,” Davidowitz said. “You can't have this wealth destruction and think it's going to get fixed.”
Retailers' same-store sales fell 0.9 percent in December, according to Thomson Reuters, compared with a gain of 0.5 percent a year earlier.
Wal-Mart delivered the biggest surprise, reporting its same-store sales rose 1.7 percent last month, well shy of the 2.8-percent increase expected, and slashed its fourth-quarter earnings forecast.
Davidowitz said Wal-Mart's customers have really taken the brunt of the economic pain.
“You gotta look at the weakness of the Wal-Mart customer,” Davidowitz said. “Twenty-percent of them don't have bank accounts,” he said of the 150 million people who shop in Wal-Mart stores each week.
“And where is this unemployment coming from?” Davidowitz asked. “The Wal-Mart customer. Who are these people being pushed from full-time to part-time work? Wal-Mart customers. Who are the customers with subprime mortgages? Wal-Mart customers.”