12:00 AM, Dec 21, 2013 • By IRWIN M. STELZER
Years ago, when Americans began visiting Europe in significant numbers, they invariably returned with trophies ranging from cashmere sweaters (Britain), silk scarves (France), several inches on their waistlines (Italy), and assorted knick knacks. And with stories of the sullen London shop staffs who found customers an annoying interference in their day, and snobbishly condescending clerks in Paris. The offset was the ability in many countries to haggle over prices. Never mind that the result might have been a triumph for the local shopkeeper, who anticipated the haggler by setting high prices; Americans were accustomed to department stores in which tags set out prices that were not subject to negotiation.
That was then, this is now. This may be the season to be jolly, but not for retailers facing aggressive, cash-strapped, knowledgeable, and technology-laden consumers. This is not about the widely advertised discounts that retailers trumpet in their ads: those are yesterday’s discounts, on goods produced to specifications of retailers who know they will eventually be sold far below list price. The posted discount price is in line with the value of the merchandise. Today’s discounts in America are more life-threatening to retailers -- imposed by consumers who view the discount price on a sales label as the retailers’ opening bid. Americans are now finding that the haggling once practiced abroad but not at home pays off. Armed with sophisticated devices that allow them to compare in-store and Internet prices, and facing sales staffs trained to meet any competition rather than allow the customer to leave empty-handed, buyers of computer gear, flat-screen televisions sets, fridges, and other electronic gear and appliances have the upper hand. DealScience, a website that ranks online deals, says at least 20 percent of so-called “big-box retailers” such as Best Buy have price-matching policies. This might be one reason why the overall inflation rate is running at the negligible annual rate of 0.7 percent (that average conceals wide variations in price performance of various products), and why retailing is facing the sort of capacity shake-out that hit firms in the manufacturing sector years ago.
The International Council of Shopping Centers reports that malls here in America have about five times as many square feet of shopping space per capita as exist in Britain and ten times as much as in Germany. Some observers say that situation indicates that America is over-stored, that retailers should be following the lead of Abercrombie & Fitch and closing unprofitable or marginally profitable stores. But either because they think their woes are due solely to the slow economic recovery, or are locked in by long leases, or prefer more stores to more profits, or with typical American optimism believe that with spiffier stores and more appropriate merchandise they will win the day, U.S. retailers are actually adding a bit of sales capacity.
This might be because businessmen rarely recognize what the great economist Joseph Schumpeter called the “gale of creative destruction” that is the essence of entrepreneurial capitalism. When the old order changeth, yielding place to the new, the old order is often blind to what is going on. As were bricks-and-mortar retailers only a few years ago.
The tale of those traditional retailers failing until recently to respond to the invasion of their markets by Internet-based, self-styled “disrupters” is oft-told. Book stores from the once-mighty Borders chain to the local shop are, with notable exceptions of high-service shops (book stores with literate sales people), are long gone, or going. Appliance retailers have succumbed to the Amazon onslaught, led by Jeff Bezos’s decision to offer free shipping of his usually (but not always) competitively priced stuff.
10:02 AM, Dec 19, 2013 • By GEOFFREY NORMAN
First time claims came in higher than expected. Which is very nearly a sure thing. Not that the number of claims will increase. Or decrease. Just that whatever they do, it will be “unexpected."
As Michelle Jamrisko of Bloomberg reports:
12:00 AM, Dec 7, 2013 • By IRWIN M. STELZER
“Everything’s coming up roses,” a mother reassures her daughter in Gypsy, the 1959 musical chronicling the rise of burlesque dancer Gypsy Rose Lee.
8:31 AM, Dec 6, 2013 • By DANIEL HALPER
The latest employment data from the U.S. Bureau of Labor Statistics:
The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in transportation and warehousing, health care, and manufacturing.
Household Survey Data
1:14 PM, Dec 2, 2013 • By GEOFFREY NORMAN
In a routine, short-run economic downturn, people tend to adopt more healthy behaviors. You quit smoking and cut back on the drinking because … well, maybe to save money and maybe because you tend to focus more on the essentials and live less indulgently. But our current long, lingering economic malaise seems to have pushed people toward unhealthy choices. For release, perhaps, or from a fatalistic sense that things may not get better and so what.
12:01 PM, Dec 2, 2013 • By GEOFFREY NORMAN
We’ve grown accustomed to waiting for news on the economy that would signal a return to movement and growth. And, mostly, there is a forlorn quality to the waiting with most of the news indicating a continuing stalemate. Latest reports from the retail front are not reassuring. As Matt Townsend at Bloomberg reports:
12:00 AM, Nov 23, 2013 • By IRWIN M. STELZER
Go into almost any shop and hear Christmas carols and read signs trumpeting enormous discounts. Unusual, since the scramble for discounts traditionally begins after, not before, the first turkey has made the ultimate sacrifice to celebrants of Thanksgiving. By the end of next week, 45 million turkeys will have moved from farm to plate to palate, and the discount wars will be in full flow.
9:46 AM, Nov 19, 2013 • By GEOFFREY NORMAN
Cotten Timberlake of Bloomberg reports that the big retailers are:
... discounting earlier than ever as they brace for the weakest holiday shopping season since 2009.
7:04 AM, Nov 19, 2013 • By JEFFREY BELL
The nomination of Janet Yellen to chair the Federal Reserve has come down to this: a referendum on quantitative easing and zero interest rates. The money-printing program that Ben Bernanke started five years ago this month remains Yellen’s answer for how the economy will get back on solid ground. Yet in her appearance at Thursday’s Senate Banking hearing, a bipartisan group of senators expressed dismay that Fed money printing has widened the wealth gap while fueling potential asset bubbles.
9:00 AM, Nov 18, 2013 • By DANIEL HALPER
Washington, D.C. is booming. That's in large part because of a massive growth in lobbying expenditures and federal contracts.
12:00 AM, Nov 16, 2013 • By IRWIN M. STELZER
In Geneva, the famous “Pink Star” diamond fetches $83 million at auction, almost double the price ever paid for such a stone, and in Arkansas, Walmart lowers its sales outlook for the holiday season. That might be a metaphor for the holiday shopping season, where grouchy retailers are predicting a relatively tiny 3 percent increase in sales over last year.
3:15 PM, Nov 14, 2013 • By GEOFFREY NORMAN
The White House will not be dismayed. In the wake of yesterday’s Obamacare enrollment numbers, it Tweeted out a song of joy.
12:00 AM, Nov 9, 2013 • By IRWIN M. STELZER
That’s the way globalization ends, not with one large headline, but with several changes in the direction of policy, caused by events seemingly unrelated to the policy changes they produce. That’s bad news for those who believe that freer trade and an increase in the international flow of capital -- the principal manifestations of globalization -- contribute to efficiency, rising incomes and job creation. And they know who to blame -- Edward Snowden and Barack Obama.