Is it as Bad as They Say?

The news headlines are in.   The panic presses have been smoking with ill tidings.

Apparently in luxury items we did not buy like we should have.  Supposedly in this day of deflating stock portfolios, home values taking on water rapidly, and a wee bit o’ uncertainty about our jobs … well, we failed people.

Drops in revenue relative to last year’s period:

• Luxury item sales down 35%.
• Electronics and appliances down 27%
• Women’s apparel down 23%
• Furniture down 20%
• Men’s apparel and footware tied for 14%
• Online sales down 2%

But is it truly truly true-ish to say that we’ve ridden over a cliff?  Perhaps not.  In fact it’s pretty likely that the patient is lethargic, not dying of systemic infection.

It isn’t the Great Depression, folks.  Far from it.  Amazon did wonderfully.  The stores I visited were bustling with activity.  Rather, they bustled with people that were thoughtful about purchases rather than throwing stuff in their carts w/o a second’s thought (like the last few obscene displays of hedonistic credit-frenzy).

But lets take a step back here and ask:  Did we have any right to expect gains over last year?

Not really, no.  Consumer credit reliance for all sectors has been at all-time highs.  Given the average personal debt, loss in stock portfolios, dramatic decrease in home values, and increasing unemployment… it is nothing short of amazing that this year was not a bloodbath.

But not everybody is out of work.  Not everybody is in danger of losing their job tomorrow.  We still buy food, toilet paper, pizza, and gifts.  I’m not downplaying those who are jobless, as I went 8 months without work during a round of layoffs years ago – I do understand the stress and loss of self-respect that comes with the territory.

Now, that said – can we please see a listing of retailer profits v. years going back to the 70′s?    In adjusted dollars, please.  Percentages tell us nothing other than trends in a relative sense.

About the only thing I could point to that is a useful benchmark is the MarketWatch S&P Retail Index.  If you take out the ridiculous dot-com period and the Fannie/Freddie years of stupidity, our current level puts us back into an area that seems supported by the trend up to the mid 90′s.   I could be totally full of shite.  Often am.  I’d welcome some interesting dialogue along these lines, frankly (without being asses about it, thank you).