Ouch! The L.A. Times reported on Friday that “Retail sales slumped 2.4% compared with April 2006, slipping to $52.6 billion in the most wretched year-over-year showing by major retailers since the International Council of Shopping Centers began tracking the data in 1970.”
As a small business owner that wholesale my own line of products to retailers, I’m not at all surprised by the news. The big retailers are feeling the pinch that smaller retailers have been feeling for some time now. Ask anyone in a retail related business. Sales for small retailers and their suppliers have, in my opinion generally declined for the past 3 years. The bad economy (yes, it’s bad), coupled with competing with the retail giants makes it tough for the little guy to hold on.
One of my biggest complaints about economic reports is that we always hear about the big business aspect of it, but not about the small business aspect. But the fact is, small businesses are still the cornerstone of the American economy and there are more “small businesses” in America then large corporations. But the inequity is as great for small businesses competing with large corporations, as it is between the rich and the poor in this country.
Gas prices, says the L.A. Times are contributing factor to the large slump in retail sales in April. Don’t hold your breath for it to get better quick. I can tell you right now, it’s not happening. The retail “numbers released Thursday were so dismal they helped trigger the biggest stock market sell-off in nearly two months.”
If gasoline prices keep squeezing pocketbooks, the coming months could be bleak too. The national average reached $3.04 a gallon Thursday and the California average hit $3.49.
“It’s changed the whole dynamics of my shopping,” said Roger Ervast, a chemist who lives in Redlands.
Sales in April at stores open at least a year, a standard measure in retailing, fell 16% at Gap Inc., 6.1% at Target Corp. and 3.5% at Wal-Mart Stores Inc. The world’s largest retailer said it was the worst performance in at least 28 years.
I’ve been in business for 12 years and I chart my sales on a month to month comparison from the year before. By the end of April, I noted a nearly a 20% decrease in sales from last year’s first 4 months. The only relief is the black and white news from the L.A. Times that guess what, I’m not the only one in the red.
And of course, adding insult to injury for the little retailers struggling to eek out a living in the BushCo economy is the news that “Luxury chains did well — especially Saks Inc., up 11.7% — and wholesale clubs turned in respectable results.” Otherwise, the L.A. Times reports, “the suffering was widespread.”
Finally, in another interesting economic news piece, we find from Business Week that some companies in America are making bank of the poor: “The Poverty Business… Inside U.S. companies’ audacious drive to extract more profits from the nation’s working poor.”
The bottom line is, the bottom line has dropped more than a few notches and the recovery is bound to be very slow, unless you’re in the elite category of BushCo tax cut recipients spending your loot culled from the poor at Saks.