The US retail sales in the first two weeks of November 2008 declined drastically as consumer confidence was very weak due to global financial meltdown.
According to the data released by MasterCard Advisors SpendingPulse service, the sales of apparel, appliances and shoes in the US declined drastically in the initial two weeks of November 2008, as reported by Reuters.
The overall retail industry sales in the first two weeks of November plummeted 19% on the same period last year, with women’s and men’s apparel sales dropping 19.7% and 20.5% respectively. Footwear sales also tumbled 11%. Appliances, specialty apparel, electronics and luxury were the top losing categories, with revenue reaching below where it had been in October 2008. Electronic and appliances sales witnessed a sharp decline of 22.1% and the total luxury sales (high-end luxury stores and jewelry) fell 21.1%. In contrast, the Internet sales remained modest, slumping 7.5% primarily due to downfall in consumer spending on furniture and computer by $500-$1,000.
This slump in the US retail sales is accredited to low consumer confidence due to the financial crisis. With deepening of the global financial crisis, consumers restricted their spending to essential products and escaped from buying clothes and expensive electronic items. Moreover, the situation was worsened by layoffs in companies and the fear of recession that forced consumers to cut down spending.
However, November retail sales better than that recorded in October 2008, probably because of the completion of the US presidential election. Now consumers are returning to the stores. Falling gasoline prices further boosted the sales.
The sharp fall in the retail prices during November 2008 has forced the industry experts to forecast that the coming festive season is likely to remain dull with consumers restrain from making hefty purchases. Industry experts have predicted that the coming festive season will be the worst in terms of retail sales in nearly two decades.
According to a Research Analyst at RNCOS, “The announcement of bankruptcy by some big US companies and failure of financial institutions have posted a tough challenge before the US retailers as purchasing power of people has gone down significantly. The retail environment is deteriorating and retailers have to wait for sometime to see some improvement in the sales figure.”
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