While many retailers in the United States might be having visions of sugar plums, a lot will be left holding a chunk of coal. And in spite of the economic pressures facing American retail stocks, this piece of coal will not turn into a diamond.
Even though the U.S. economy is reportedly on stronger footing, you wouldn’t be able to tell by the number of people out shopping. Traffic to U.S. retail stores is expected to slip 1.4% this November and December. In the last two months of 2012, traffic increased by 2.5% after falling 3.1% in 2011. (Source: Wohl, J., “U.S. holiday sales expected to rise less than last year: Reuters web site,” September 17, 2013.)
This cannot help but translate into weaker-than-expected sales. In fact, sales at U.S. stores are projected to rise just 2.4% in November and December, compared to three percent for the same period in 2012, four percent in 2011, and 3.8% in 2010.
Granted, these miserly 2013 holiday sales projections came out ahead of recent economic data that showed the U.S. added more jobs than expected in October. However, even that observation is missing the bigger picture; after all, shoppers need money to shop.
In 2012, the country’s supplemental poverty rate was 16%; despite the great strides made on Wall Street over the last two years, the supplemental poverty rate remained unchanged from 2011. The 2012 official poverty rate in the U.S. was 15%, unchanged from 2011. (Source: “Supplemental Measure of Poverty Remains Unchanged,” U.S. Census Bureau web site, November 6, 2013.)
The supplemental poverty measure accounts for the impact of different benefits and … Read More