Anxiety Fuels Retail Sales Declines

Whether online or in the mall, consumers are spending less and retailers are feeling the pain, a number of recent reports show.

Whether it was Nordstrom (NYSE: JWN) reporting a 15.7 percent decline in comparable store sales for October or online data firm ComScore detailing a Q3 slowdown in online retail sales, the news was grim.

Online retail sales rose just 6 percent in the third quarter, much slower than the 12.5-percent growth rate of the first half of the year, ComScore said.

Brick-and-mortar retailers, excluding Wal-Mart (WMT), are having a tougher time, with October same-store sales falling 0.7 percent and foreshadowing a disastrous holiday selling season.  As we wrote earlier this week, Moody’s has warned of a deteriorating outlook for apparel manufacturers as well.

“November promises to be a messy month for all reporting retailers,” writes Carol Levenson, credit analyst at Gimme Credit LLC.  Aside from the financial crisis and deepening recession, Levenson points out that there’s one less week of post-Thanksgiving Christmas shopping.

Somehow we don’t think an extra week would make much difference as shoppers have been postponing their holiday shopping for the past few years. Furthermore, it’s not the number of shopping days but the cautious spending climate that will tell the tale this season.

On that score, Forrester Research reports that 58 percent of Americans surveyed online said they’re spending less money now than they did a year ago as a result of the economy. Not surprisingly, the lower the income, the more spending was curtailed.

Though one-third of Americans were pessimistic about the overall economy, 47 percent of respondents were optimistic about their own personal financial situations in the coming year.  Denial? Or a positive sign that consumer confidence is ready to bounce back when the economy stabilizes?