Seeking Alpha

Warnings from major retailers hard to ignore

  • Brutal competition between major retailers on pricing could bring holiday sales to a lower level than economists anticipated.
  • Though many forecasts still show holiday sales improving at a 2.5%-4% clip, the latest round of warnings from Best Buy (BBY), Wal-Mart (WMT), and Target (TGT) are hard to ignore.
  • Also in play is a "crowding-out" effect as increased consumer spending on automobiles and housing saps the meager 1.5% wage increase the working class saw this year.
  • Related ETFs: XRT, PMR, RTH, VDC.
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Comments (2)
  • heddenrpsr
    , contributor
    Comments (2) | Send Message
    The drop in gas prices will save the day.
    22 Nov 2013, 09:03 AM Reply Like
  • steve4466
    , contributor
    Comments (95) | Send Message
    It's very interesting to see deflation at work in supermarkets - I'm in my 50s and it's the first time I remember seeing this. When people have less to spend in stores you might have thought the response would be "that's tough, you'll just have to buy less food and clothing to live on". But instead the response seems to be "less money huh? Don't worry, we'll lower our prices through discounting etc. so you can buy exactly the same quantity of items as before." I don't pretend to understand the economics, but this seems to be happening.
    22 Nov 2013, 10:43 AM Reply Like
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