It remains impossible to gauge what's going on with the consumer.
Two stories hit my inbox almost simultaneously earlier today. One talks about how consumers are resisting even the deepest discounts and lays out an ominous picture.
Wal-Mart Stores Inc.'s chief financial officer, Tom Schoewe, told journalists that its deep price cuts in May and June, including the cheap ketchup and soda, weren't enough to bring people in the door and get them to buy other things.The cuts targeted 22 foods and other essentials at an average savings of 30 percent. The original price for the big bottle of ketchup was $2.42.
"If low-income shoppers are passing that up, that goes to show you how tapped-out they are," said Ken Perkins, president of research firm RetailMetrics.
One key measure of revenue dropped at Walmart for the fifth quarter in a row, dragged down by its U.S. namesake stores. Customers are having a hard time stretching their dollars to the next payday, and food-stamp use is still rising, the company said.
Middle-income shoppers are not faring much better. And stores can't even count on shoppers with jobs because of layoff fears. As for the affluent, they're holding up better, but wild stock-market swings have them a bit spooked as well.
Sounds grim.
Yet the other piece, cites Westfield co-Managing Director Peter Lowy's comments from the firm's second quarter earnings call and lays out a much rosier picture.
“From an operating point of view, we're not planning on a double dip,” Westfield co-Managing Director Peter Lowy said in a telephone interview today. “The real issue for us is not whether you've got 4 percent GDP growth or 3 percent or 2.5 percent, but the fact that we still have growth. Growth in sales from our retailers means we're in a better position this year than we were last year.”...
Confidence among U.S. consumers rose in August, a sign the biggest part of the U.S. economy may soon stabilize.
...
Westfield management are “more optimistic about retail sales in the U.S. by quoting positive trends in leasing, arrears and sales,” Rhett Kessler, a fund manager at Pengana Capital, which holds Westfield shares, said in an e-mail. “This represents a big change, particularly given their large exposure to this market.”
Let's hope Westfield is right.
Here's some other news and notes from recent days.
- DLC Realty Shelves IPO, Blames 'Adverse Market Conditions' (Dow Jones Newswires)
- A&F returns to 2Q profit; to close 60 stores (Associated Press)
- A&P Plans to Close 25 Stores (Supermarket News)
- Las Vegas' CityCenter Expands Highend Retail Tenant Base (Real Estate Channel)