Cotten Timberlake reports for Bloomberg, Feb. 27, 2014, that according to the research firm Retail Metrics Inc., U.S. retailers last quarter had their first quarterly drop in sales since 2009 – an average drop of 6.1%.
U.S. retailers’ total revenue also rose at the lowest rate since 2009, of a paltry 1%.
The results paint a grim picture of an industry hit hard by the sluggish job recovery and slow wage growth, which have turned U.S. consumers into a nation of penny pinchers.
Ken Perkins, president of Retail Metrics, said in a phone interview: “It was a very tough season for the retailers, no question about it. They were facing pressure on multiple fronts.” Perkins said the lack of wage gains restrained many consumers from making discretionary purchases. To cope, some chains cut prices by 50% to 60%. The industry hasn’t seen such heavy discounting since the “fire sale” that took place during the 2008 holiday quarter.
Teen retailers were the hardest hit, their profit is decreasing 37%. Electronics chains and discounters are down 17% and 12%, respectively.
Still, some chains are predicting a rebound this year. Target Corp. – which saw profit and revenue tumble last quarter, in part because of a hacker attack — said sales have shown signs of improvement this month. Macy’s Inc. also predicted that spring would bring a sales recovery, after frigid weather forced it to close hundreds of stores.
Dr. Eowyn is the Editor of Fellowship of the Minds.