Happy Holidays and Happy New Year to you and your loved ones. Here are a few headline news reports of interest from the past couple days.
U.S. Store Traffic Fell 24% on Pre-Christmas Weekend
U.S. retail store traffic fell 24 percent last weekend from a year earlier as deepened discounts failed to entice consumers to spend during what may be the worst holiday-shopping season in four decades.
Retail sales declined 5.3 percent Dec. 19 through Dec. 21 because of inclement weather and a slowing U.S. economy, Chicago-based research firm ShopperTrak RCT Corp. said today in a statement.
Traffic decreased 6.5 percent for the week through Dec. 20 from a year earlier, ShopperTrak said. The company uses a sampling of more than 50,000 stores in shopping centers and malls to measure foot traffic, or count the number of customers that enter the locations.
ShopperTrak said yesterday that U.S. customer traffic on Dec. 20, also known as “Super Saturday,” fell 17 percent from the corresponding day a year earlier, Dec. 22, 2007. Foot traffic was hurt by the economy, unfavorable weather and a calendar shift, the Chicago-based research firm said today in a statement.
Same-store sales in November and December may drop as much as 2 percent, the International Council of Shopping Centers said yesterday, more than the previously projected 1 percent decline. That would make it the worst Christmas sales season in at least 40 years.
Holiday season magnifies shoppers’ frugality
Over the past year, shoppers have drastically changed their spending habits in ways not seen since the 1970s, switching to store brands and discounters like Wal-Mart. During the holiday shopping season, they cut back on their spending, took advantage of big discounts and bought practical gifts.
“Last year, when things were a little bit better, if there was stupid little things you think someone might like, you grab it for them,” said Bruce Guckert, 23, a carpenter from Everett, Mass., who was out shopping on Wednesday. “This year, you get them things they might need, or want more than others.”
One of the big worries for stores is what to do with the mounds of items they still have to sell. If 75 percent off before Dec. 25 didn’t make people splurge, will even bigger deals afterward do the trick? Another problem is that shoppers shunned gift cards this season. That means they are less likely to return to the stores after the holiday.
“The new consumer mantra for this coming year is: If I don’t need it, I won’t buy it,” said C. Britt Beemer, chairman of America’s Research Group. “America has going from a consuming society to a planned-buying society. Everything is focused on saving more money.”
The retail industry could be looking at its biggest contraction in 35 years, according to Burt P. Flickinger, III, managing director of consulting firm Strategic Resource Group. He estimates that 160,000 stores will have closed in 2008 and predicts that an additional 200,000 will shutter next year. In March and April of 2009, Flickinger expects 2,000 to 3,000 malls to shutter.
Consumer spending fell for a fifth straight month in November, government data showed Wednesday, the longest weak stretch in half a century, while incomes fell and layoffs mounted.
That losing streak is going to continue for at least another month as after Christmas sales are going to be grim.
Price-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending, according to new data released Thursday.
Despite a flurry of last-minute shoppers lured by the deep discounts, total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.’s SpendingPulse unit.
When gasoline sales are excluded, the fall in overall retail sales is more modest: a 2.5% drop in November and a 4% decline in December. A 40% drop in gasoline prices over the year-earlier period contributed to the sharp decline in total sales.
But considering individual sectors, “This will go down as the one of the worst holiday sales seasons on record,” said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. “Retailers went from ‘Ho-ho’ to ‘Uh-oh’ to ‘Oh-no.'”
The holiday retail-sales decline was much worse than the already-dire picture painted by industry forecasts, which had predicted sales ranging from a 1% drop to a more optimistic increase of 2.2%.
Luxury goods, once considered immune from economic turmoil, were hardest hit, with sales falling 21.2%, compared with a jump of 7.5% a year ago, when the economy had just begun to sputter. Including jewelry sales, the luxury sector plunged by a whopping 34.5%.
No retail sector was spared. Among the biggest losers were electronics and appliances, which fell a combined 26.7% versus a 2.7% gain last year. Women’s apparel slid 22.7% compared with a 2.4% drop a year ago. E-commerce showed the most resilience, with online sales falling just 2%. But it was still a disappointment compared with last year when online sales posted a 22.4% gain in the period.
Retailers soon may face yet another blow. In recent years, they have seen a big lift in post-Christmas sales as shoppers coming back to stores to redeem gift cards often spent more than the card amount to buy full-price merchandise. But Deloitte’s holiday consumer survey earlier this week found that shoppers expected to spend only $151 on gift cards this season, a 24% drop from last year.
I consider this excellent news. The shopping needs to end so the savings can begin.
Paulson Steals Show From the Grinch
Did I hear someone say “making a list, checking it twice?” Not Hank. He might as well have made the checks out to cash. Come to think of it he did.
The Associated Press tried to do what Paulson hasn’t, asking 21 banks how much they’ve spent and on what, how much is being held in reserve and what their plan is for the rest. The folks responsible for the mess, in possession of billions of our dollars, were too arrogant to say.
JPMorgan Chase & Co. said of its $25 billion haul: “We’ve lent some of it. We’ve not lent some of it,” AP reported. Now get lost.
Bank of New York Mellon Corp. spokesman Kevin Heine told AP, “We’re choosing not to disclose that.” Wendy Walker of Comerica Inc., after refusing to share any details, said, “We’re not sharing any other details. We’re just not at this time.”
What time would be better, Ms. Walker? Never. I bet never is good for you.
Financial superstars got used to talking this way when they were lionized as American royalty. Sprawling oceanfront estates the size of hotels, private 737s outfitted like palaces weren’t marks of wretched excess but totems of swashbuckling capitalist derring-do.
This happened even as almost no one knew what these geniuses were doing. They weren’t making anything like a railroad you could see. They were moving money from one place to another, keeping some for themselves as it changed hands.
Try to follow the trajectory of a mortgage on a house in Cleveland into a bundled credit default swap of collateralized debt. Few could, yet paydays of $30 million and bonuses of twice that were based on it. Therein lay its charm.
Thanks to an economic meltdown, we now know the decade’s financial superstars walked off with money they didn’t earn in a scheme more sophisticated but no less damnable than a punk in a ski mask holding up a convenience store.
You would think heads would roll, some into jail. I’m not just talking about Bernard Madoff. I’m talking about the titans of commerce.
They still walk the streets, when in truth schemes should be named after them. Ponzi just doesn’t do justice to what they pulled off.
But why isn’t anyone screaming about giving these miscreants more money? Who’s in charge here? Surely, there is someone left with a conscience, and a pulse, in the White House, someone in Congress who can call a hearing and rough up these bankers at least as much as they did the auto industry.
Fortunately, I’ve found something even a Grinch can be jolly about: Reverend Warren’s stricture against gays in his church was removed from his Web site this week. And for 2009, the number of applicants to Teach for America jumped to 25,000 from 18,000 for 3,700 chances to serve in the poorest schools.
The best and the brightest want to do good instead of doing well. I’ll raise a glass to that.
Homeless advocates ‘liberate’ foreclosed houses
Max Rameau delivers his sales pitch like a pro. “All tile floor!” he says during a recent showing. “And the living room, wow! It has great blinds.” But in nearly every other respect, he is unlike any real estate agent you’ve ever met. He is unshaven, drives a beat-up car and wears grungy cut-off sweat pants. He also breaks into the homes he shows. And his clients don’t have a dime for a down payment.
Rameau is an activist who has been executing a bailout plan of his own around Miami’s empty streets: He is helping homeless people illegally move into foreclosed homes.
“We’re matching homeless people with people-less homes,” he said with a grin.
“I think everyone deserves a home,” said Rameau, who said he takes no money from his work with the homeless.
In early November, Rameau drove a woman and her 18-month-old daughter to a ranch home on a quiet street lined with swaying tropical foliage. Marie Nadine Pierre, 39, has been sleeping at a shelter with her toddler. She said she had been homeless off and on for a year, after losing various jobs and getting evicted from several apartments.
“My heart is heavy. I’ve lived in a lot of different shelters, a lot of bad situations,” Pierre said. “In my own home, I’m free. I’m a human being now.”
Rameau, who makes his living as a computer consultant, said he is doing the owner a favor. Before Pierre moved in, someone stole the air conditioning unit from the backyard, and it was only a matter of time before thieves took the copper pipes and wiring, he said.
“Within a couple of months, this place would be stripped and drug dealers would be living here,” he said, carrying a giant plastic garbage bag filled with Pierre’s clothes into the home.
Miami spokeswoman Kelly Penton said city officials did not know Rameau was moving homeless people into empty buildings – but they are also not stopping him.
“There are no actions on the city’s part to stop this,” she said in an e-mail. “It is important to note that if people trespass into private property, it is up to the property owner to take action to remove those individuals.”
Pierre herself could be charged with trespassing, vandalism, or breaking and entering. Rameau assured her he has lawyers who will represent her for free.
Two weeks after Pierre moved in, she came home to find the locks had been changed, probably by the property’s manager. Everything inside – her food, clothes and family photos – was gone.
But late last month, with Rameau’s help, she got back inside and has put Christmas decorations on the front door.
So far, police have not gotten involved.
Giving in tough times balancing act for companies
Across the nation, the needs are growing as the recession deepens and leads to more families struggling each day just to put food on the table. Feeding America, the largest domestic hunger-relief organization, says some 25 million people are going to such food banks, and the number is rising. And at the same time, many usual donors are facing their own budget problems.
FreestoreFoodbank expects to serve 16,000 households here this holiday season, and says demand has jumped 55 percent in the past two years, as jobless numbers rise and household budgets get stretched. But companies such as grocers Cincinnati-based Kroger Co. and Minneapolis-based SuperValu Inc.; Northfield, Ill.-based food maker Kraft Foods Inc.; and St. Louis-based bakery-restaurant chain Panera Bread Co., among others, have helped keep filling bags here.
“They get it,” said John Young, the food bank’s chief executive. “They understand that we’re serving many more people this year. It’s touching their customers, their communities.”
Not all businesses are reacting in the same way, though. The New York-based Committee Encouraging Corporate Philanthropy found that about a third of companies surveyed cut 2007 charitable giving in the slowing economy, and there are indications of more reductions this year. Sectors that showed declining giving in 2007 were financial, health care and utilities.
“It’s a conflict, no question. How do you keep giving when you have laid off employees and are making other cost cuts?” said Charles Moore, the committee’s executive director. But he stresses to corporate leaders the customer loyalty and connection to community they can build through giving — benefiting business in the long run.
“You can be sure the community won’t forget that the company stepped up,” Moore said. “There is business to be gained at all levels by companies digging deeper in difficult times.”
Wal-Mart Stores Inc., the Bentonville, Ark.-based retail giant that has seen sales continue to grow in a discount-minded economy, has increased its giving of cash and food this year.
“We’ve made an extra effort to stand shoulder-to-shoulder with our community partners and our customers who maybe need some extra help,” Wal-Mart spokeswoman Deisha Galberth said. She said the company, which donated nearly $300 million to charity last year, will top that this year. Wal-Mart last week gave $400,000 in hard-hit Ohio alone, to help feed families and pay utility bills this winter.
Besides food, charities say there is also a big need for household items. P&G; has a barrage of efforts involving its products, including Duracell battery donations and an Iams pet food pet adoption program at a time of rising abandonment of household pets. P&G; also plans to provide millions of meals for children by tying consumer use of its coupons — coupon-clipping has made a comeback during the recession –to company donations.
While cutting costs in other areas, P&G; says it is keeping up charitable giving of well over $100 million a year.
“We are committed in good times and in bad,” said Brian Sasson, global manager for P&G; philanthropy. “We’re proud to be helping families get what they need in these tough times.”
Three cheers to the much maligned Wal-Mart for donating $300 million to charity and another cheer to P&G; for donating $100 million.
Eartha Kitt, a Seductive Talent, Dies at 81
Eartha Kitt, a sultry singer, dancer and actress who rose from South Carolina cotton fields to become an international symbol of elegance and sensuality, has died, a family spokesman said. She was 81.
Kitt, a self-proclaimed ”sex kitten” famous for her catlike purr, was one of America’s most versatile performers, winning two Emmys and nabbing a third nomination. She also was nominated for several Tonys and two Grammys.
Her career spanned six decades, from her start as a dancer with the famed Katherine Dunham troupe to cabarets and acting and singing on stage, in movies and on television. She persevered through an unhappy childhood as a mixed-race daughter of the South and made headlines in the 1960s for denouncing the Vietnam War during a visit to the White House.
In 1996, she was nominated for a Grammy in the category of traditional pop vocal performance for her album ”Back in Business.” She also had been nominated in the children’s recording category for the 1969 record ”Folk Tales of the Tribes of Africa.”
Kitt also acted in movies, playing the lead female role opposite Nat King Cole in ”St. Louis Blues” in 1958 and more recently appearing in ”Boomerang” and ”Harriet the Spy” in the 1990s.
On television, she was the sexy Catwoman on the popular ”Batman” series in 1967-68, replacing Julie Newmar who originated the role. A guest appearance on an episode of ”I Spy” brought Kitt an Emmy nomination in 1966.
Kitt was plainspoken about causes she believed in. Her anti-war comments at the White House came as she attended a White House luncheon hosted by Lady Bird Johnson.
“You send the best of this country off to be shot and maimed,” she told the group of about 50 women
Her first album, “RCA Victor Presents Eartha Kitt,” came out in 1954, featuring such songs as “I Want to Be Evil,” “C’est Si Bon” and the saucy gold digger’s theme song “Santa Baby,” which is revived on radio each Christmas.
There’s much more about her long list of accomplishments in the article.
Mike “Mish” Shedlock
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