…About 4 decades!
Recession worries have put a huge damper on holiday sales, raising the possibility of many retail bankruptcies in 2009.
The slump comes as the economy continues to eat away at consumer wealth and confidence. Home sales hit a 17-year low in November and home prices are falling at the fastest rate in at least 40 years. The rapid decline of home values is contributing to the sinking holiday sales.
After a particularly slow week before Christmas, the International Council of Shopping Centers projected that Christmas sales will drop by as much as 2 percent from last year. This is the worst performance since1969. Last weekend, for example, six in 10 Americans stayed away from the stores instead of shopping for gifts.
Wal-Mart seems to be one of the only retailers doing well this season. A number of major names like Macy’s are in trouble and there will undoubtedly be troubles for many retailers in the New Year.
Retailers generate about one-quarter of their annual sales and about one-third of their profits during the holidays.
Consumers have been spooked by the loss of over a million jobs in the past three months, the relentless announcements of new layoffs from corporations, the failures of major big-name businesses, plunging home prices and the sudden loss of available credit through home-equity loans and credit cards.
The only positive news appears to be the fall in gas prices. This is providing households with much-needed purchasing power. Most of the windfall is being saved, not spent, however.
