Recession Special: Everything at Walmart

Apparently, the recession hurts less at Walmart. A recent survey of American consumers had some interesting results: people are a lot less interested in shopping than they have been in decades and are turning to discount retailers like Walmart to ease their financial pain.

Walmart is exceeding expectations in the recession
Walmart is exceeding expectations in the recession

“This is the first time in 30 years of consumer surveys that we’ve seen this low interest in shopping,” said Britt Beemer, CEO of America’s Research Group.

The principal reason for low discretionary spending is that 48.5% of consumers feel pressure from credit card bills, the survey said.

The change in consumer behavior also has a philosophical basis, said Beemer.

You might expect discount retailers to attract shoppers in a recession. Makes sense, right?

Well an interesting addition to this recession success is that Walmart reported much higher than expect sales in April. Same-store sales, which are often the most reliable indicators of a store’s health, were up 5% in that month. Well, I guess we’ll see you at Walmart (if we haven’t already).

Amazon’s 2008 Holiday Season Sales Were Best Ever

Amazon bucked the overall trend of sliding retail sales this year with their best holiday shopping season ever, with its busiest day seeing a 17% increase from last year.

For December 15, Amazon’s largest day for orders, the retailer sold 6.3 million items, up from 5.4% on the same day last year.

Inquisitr reports that one of the most popular items purchased through Amazon this year was a nose and ear hair trimmer. The Groom Mate Platimum XL was the most-purchased item in the health and personal care products category.

Amazon's 2008 Holiday Sales Were Up 17% From 2007
Amazon's 2008 Holiday Sales Were Up 17% From 2007

Though Amazon was quick to release this report, it is unclear as to whether this trend was enjoyed by other well-known online retailers. Overall sales for the holiday shopping season were down about 5.5%, and online sales were projected to be up 2% this year. Reports from other big-name online retailers has not yet been released.

Low overhead and bulk purchasing allow online retailers like Amazon keep costs low, which may have lured more customers this year looking for great deals. Many states also collect no sales tax on online purchases, making the deals that much sweeter.

2008: Worst Holiday Shopping Season Ever?

Despite widespread price-slashing this holiday season, retailers are already calling 2008 one of the worst seasons on record. Sales plunged in most categories of retail this year as consumer spending continued to decrease, despite retailers’ best efforts to entice shoppers with big discounts.

Retail Sales May Have Been the Worst On Record in 2008
Retail Sales May Have Been the Worst On Record in 2008

Total retail sales, which excludes cars and other vehicles, dropped by 5.5% from last year in November and 8% compared to last December.

These numbers are much worse than were expected by industry analysts, who predicted that sales would drop 1% in the worst forecasts.

“This will go down as the one of the worst holiday sales seasons on record,” said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. “Retailers went from ‘Ho-ho’ to ‘Uh-oh’ to ‘Oh-no.'”

Luxury items took the biggest hit this year, dropping 35% from last year’s levels. Electronics and appliances fell 27%, furniture dropped 20% and women’s and men’s apparel slid 23% and 14% respectively from last year.

Despite major discounts offered in the front-end of the holiday shopping season and more big promotions during the last days of the season, shoppers did not take the bait. Worried by bad economic news and perhaps constrained by the lack of available credit, consumers remained comparatively stingy with their money.

In a year where retail has already been suffering, the holiday shopping season was seen as an opportunity to turn things around. Already this year, the country has seen several retail bankruptcies, including Circuit City and KB Toys. The weak holiday sales may mean that more retailers will also file for bankruptcy and close their doors.