Calling Captain Obvious: December Retail Sales-All the Signs Were There

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  • on January 14th, 2012

Although I hate bad news, I do want to give you all a subtle (and we ALL know how subtle TB can be . . .)  reminder that I have been the lone contrarian analyst out there vis a vis poor retail holiday sales throughout the months of November AND December. And unfortunately my predictions proved true: Retail Sales rose 0.1% in December. No, that wasn’t a type-o.How can that be when all we heard was positive headlines about intense consumer spending for Black Friday etc.?

Recall that holiday retail sales follow an hourglass pattern–and this year was no exception, with the peaks and lulls even greater: Huge bang on Thanksgiving night, fortified by online retail sales then a drop off for most of December, followed by a pop on the Saturday before Christmas.

HOWEVER: my contention was that most consumers blew their wad on Black Friday, and as uncertainties about payroll tax holidays loomed large, along with the average everyday American facing the grim possibility of having another $40 scooped out of their paycheck by the U.S. Govt., buyers remorse set in and consumers pulled back spending in December.


All this while Congress took the partisan battle right up to the deadline yet again–just like the debt ceiling debacle. This do nothing Congress sat on the sidelines until forced by a hard deadline, which in turn exacerbates an already fearful private sector on down to the consumer.

December same store sales play this out beautifully illustrating the bi furcated consumer and where they spent their holiday dollar,  (meaning high end luxury stocks like $JWN Nordstrom, $SKS Saks and $BRBY.L Burberry are thriving, and low end discounters are stealing market share from the Target’s $TGT and Kohl’s $KSS of the world), and the middle class–as is middle market retail–is vanishing  right before our very eyes, (ahem $SHLD.)  Bottom line–I was bearish all thru the holiday season, and continue that premise throughout 2012, until a new administration takes hold in the White House.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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