Brace yourself for a retail whiplash

Analyst say same-store sales numbers from leading retail chains may show the weakest performance since 2000.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Parija B. Kavilanz, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Leading retail chains are poised to report the worst monthly sales in eight years on Thursday in another solid sign of an economy in distress.

Analysts expect October same-store sales, or sales at stores open at least a year, to show a 0.3% decline, according to Thomson Reuters.

The firm tracks monthly sales for 34 of the nation's largest retailers including Wal-Mart (WMT, Fortune 500), Gap (GPS, Fortune 500), Sears (SHLD, Fortune 500) and J.C. Penney (JCP, Fortune 500).

If the figures come in as expected, the monthly decline would mark the the weakest same-store sales results ever registered since Thomson Reuters first started tracking the estimates in 2000.

Year-to-date, same-store sales have risen just 1.8%. And on a year-over-year basis, each month from January through September showed declines.

Excluding Wal-Mart, who's low-price discount model has enabled it to weather the consumer spending slump better than its rivals, last month's sales are predicted to have slumped as much as 2.3%.

The results in October would cap an already excruciating sales year for merchants whose business has suffered as more Americans clamp down on their discretionary purchases in light of a shaky economy and job market.

Consumer spending is a key component of the economy since it accounts for two-thirds of the nation's economic growth.

Subsequently, deteriorating retail sales mean the economy may get even worse because "we can't expect consumers to pull us through this downturn like they have in the past," said Stevan Buxbaum, retail analyst with consulting firm Buxbaum Group.

All the economic challenges that confront Americans today have "finally broken the habit of consumerism in this country," he added. "We're not buying two of everything now but making do with one."

Buxbaum's assessment was supported by a new monthly consumer spending survey released Wednesday from credit card issuer Discover Financial Services (DFS) which showed that a majority of 15,000 Americans polled, or 60%, rated the economy as "poor," and 79% said they had not increased their [discretionary] spending even as gas prices has eased.

"October's [survey] numbers show consumers are clearly hunkering down to ride out the economic and financial crisis," Margo Geogiadis, chief marketing officer of Discover Financial Services, said in the report.

"All the negative news about bank rescues, job reductions, mortgage foreclosures and stock market volatility are giving consumers no reason to abandon the caution they've employed in terms of their spending," Geogiadis said. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
My part-time job is a dead end, but it's all I can find CNNMoney profiles 4 of America's 7 million part-time workers unable to find full-time jobs. More
Cool cars from the LA Auto Show There are some of the standout vehicles on display this year at the Los Angeles Auto Show. More
American Dream homes: Prices in 10 cities How much does the American Dream home cost? From $2 million in Los Altos, Calif., to $65,000 in Cleveland, here's what you'll pay for a 4-bedroom, 2-bath house, according to Coldwell Banker's annual survey. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.