Surprise! Retail sales abysmal this holiday season
By Joseph L. Flatley 
posted Dec 27th 2008 8:27AM
posted Dec 27th 2008 8:27AM
Perhaps it was a foregone conclusion -- and the Black Friday body count was a rather ominous sign -- but this holiday season, according to some poor sap interviewed by the Wall Street Journal, "retailers went from 'Ho-ho' to 'Uh-oh' to 'Oh-no.'" (Way to make light of a serious issue, guy -- that's our job). Sales are down across the entire retail sector, from luxury goods (including jewelry sales, down 34.5 percent) to electronics and appliances (down 26.7 percent). This is all bad news for the likes of Circuit City, who is operating under Chapter 11 and could use the cash, but great news for bloggers like Business Pundit, who is having a field day with his parodic corporate logos, a few of which can be seen above. You know what they say: when life gives you lemons...
[Thanks, Agustin; image courtesy of Business Pundit]
[Thanks, Agustin; image courtesy of Business Pundit]
Look I'm sorry but I bought a computer, a phone, jewelry, frigging furniture, ALL KINDS OF CRAP THIS YEAR!
More than ever!
-so don't blame me. I did my part.
Oh, and when life gives you lemons -cut the CEOs bonus that year, idiots.
Watch stuff happen then.
sure, let's cut bonuses left and right. god knows we're in this mess because of irresponsible execs at consumer goods companies. oy.
Yes, to a certain degree that IS the problem.
Corporate America in general is too busy cashing in to give a crap about the companies that are being run or the people who make thenm what they are.
Oy indeed.
"my part"... I cant stand it when people say that. OR, when retailers say "the consumer has to do their part"...
WHY? What, precisely, do you do for us? You treat us like crap when we walk into a store. You so-called employees dont know diddly. Your customer service does nothing but screw up our accounts and never corrects our problems. And your products next-to-suck since their all made with spit, in China.
So what EXACTLY do you want from us? Hand over our hard-earned money?
Take a hike. I think thats what we told you this year. Take a hike!
When life gives you lemons make f*#$ing grape juice and blow their minds
When life gives you lemons...FIND A NEW GOD!!!!
Amazon sales were actually UP, so it's only B&M that's suffering and it's obvious why. About the consumer doing their part, our economy is 70% consumer driven in comparison to other countries which are mainly 50/50. (Consumer/Government)
At least Amazon had their best year!
I think Steam will do quite good too, what with this amazing sale it has going on.
Yeah, I think all this recession did was accelerate our conversion to web-based sales. Why would I fight the crowds of people when I can order something from amazon for less! It's just better. The fact that it's cheaper is what has made more people make the switch.
The only disadvantage is not being able to see the product in person before you buy. But when the market is in the tank and I can buy the same thing from newegg or amazon or wherever for cheaper, then why would I drive to best buy?
It's not that people weren't buying, its that people weren't buying from them.
This is the first year I did the majority of my shopping online. All from Amazon too... And I have to say, I rather liked it!
"Why would I fight the crowds of people when I can order something from amazon for less!"
Because all the food i order online always arrives spoiled :-(
One thing I've noticed as of late is that on average, the DVD prices at my local brick-and-mortar Best-Buy are significantly lower than Amazon's. Was surprised. Of course, Best Buy still dealt in the hundred-dollar HDMI cables...
@ Wii60: "The only disadvantage is not being able to see the product in person before you buy."
But that's the beauty of YouTube! Pretty much everything I've ever wanted to buy has been unboxed and torn down on that site.
The US postal service wants everyone to buy from Amazon and eBay.
It'll keep all our mailmen/women employed.
Depression here we come.
Good. Depression will teach a LOT of people how to come back down to earth. To reality.
There's still a long way to depression.
yeah and will get a reality check.
"A depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations."
Sure that's straight from Wikipedia, but it's not like it's wrong all the time. All we're missing is the numerous bankruptcies, and only the government seems to be trying to prevent that from happening. And it's doing a half-assed job at that.
"In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing."- Magic of Wikipedia.
Sound familiar?
We've HAD a sharp decrease in trade for years. Well, a decrease in one direction: exports. Now we see the lack of buying power even for the glut of imports.
I didn't buy because of the simple fact that there was nothing I was interested in.
This holiday shopping season was only about HD Tv's and GPS systems. Couple that with the weather we've been having...forget that. I'm keeping my money and waiting for next year for the prices to drop.
Unless the make the bb bold, xperia or ps3 all under $300. NOW WE TALKING!!
Is this a surprise? Most "smart" shoppers knew there were no real deals at the B&M stores. If, as someone stated, Amazon had its best year it's because their holiday sales have been great. The only people to really blame are the execs who thought they could sneak by with crappy deals.
Exactly. I was looking at some boxing day (Canada here) sales in BB the other day and they were selling PS3 with remote for $400, then I went to Amazon and saw that they were selling the same PS3 model for the same price without any sales, it just didn't have the remote. I checked, the remote is $25. So basically, the biggest sale day in Canada (boxing day is pretty much our version of black Friday) and all BB could do is give me a lousy $25 remote with a PS3 - pathetic.
Very creative, love the display.
But hey, the economy is tough, our company just layed of 60 people, most of them probably made 90k-130k, most were senior managers and heads of the departments. Other companies are cutting even more, eliminating 401k contributions and other benefits, so it is really tough out there and people are saving money, and so they should.
I think if some of these tech giants want to get back in the game they need to sell of their inventory at normal prices (yes it will take long) but after that they should roll out the newest products they have to bring consumer back. Most desktops should come with i7 and that new AMD chip, basically bring technology so cutting edge, people simply will have to come back and buy it.
the i7 should be cheap enough in 6 months... at least I hope!
Seems retailers have learned a lot from infomercials, you know that ones that have crappy stuff to sell and the announcer always hits you with this line, " This product VALUED AT $200 can be yours now for only $19.99 but you have to call in the next 15 minutes"! Yeah right and I have a bridge in Manhattan I want to sell you, but only for the next fifteen seconds!True story happened this morning to a friend of mine who lives in Cape Coral Florida. A well known store had an ad for a great large flat screen by Sony on sale this morning, the sale started at 5am and ended at 7am for that TV. The ad said, quantities greatly limited. So she gets up at 4am, drives to the store and is surprised to see only ten other cars in the parking lot. The doors opened at 5am and she heads straight to the electronics department, She is one of the ten customers in the store and the only one in electronics, she can't find the flat screen on sale. So she gets a salesperson who tells her he just sold out of it and that there had been only three in that store. HUH? WHAT? Where are the other three people hiding with their sets? So he tells her he has a great Vizio flatscreen he can substitute and it's even a little larger but would be the same price, for those of you who don't know, a Vizio brand TV is like the Yugo of televisions. She declines and buys a Samsung 26" HDTV that's not on sale. She calls me at 10am with the story and I told her I would have pitched a fit with the manager of the store, I would have called every local TV station and told them to send a reporter asap. But that's me, thank god she didn't call me at 5am.
Ok, my opinion is she shouldn't of purchased ANYTHING after that.
If you think "a Vizio brand TV is like the Yugo of televisions", I have to wonder what you would compare an Olevia to, much less brands that most people have never heard of.
.. You say F$ck the lemons and bail.
No, you find someone whose life gave them vodka and mix some drinks.
Hey Retailers!We are not as stupid as we look. Hey media get real! First the stores jack up the prices to the MSRP (manufacturers suggested retail price which is a joke to begin with) then they take the 50-80 % off of that sometimes making the price even higher than their discounted price. The deals on the big screen TV's you keep hearing about. Junk brands that you have never heard of. That Sony you wanted? Still the same price but the 52 inch for $400? A no name China piece of crap that will blow up as soon as you plug it in. This whole "Holiday Sales" ripoff, is the same thing that liquidation companies do for the stores that are going out of business. You never get a real deal until there is nothing but junk left over. If you used a credit card for these "sales" I hope you pay off the balance at the end of the month, you think things are bad now, wait until you see what the credit card companies have in store for us starting around February! Any of you that did see some real sales and used a credit card and you are not going to pay it off next month, all the savings are going to be eaten away by the interest jacking that will become out of control by the credit card companies in 2009. HAPPY NEW YEAR!
Really, I got notice a few months ago when rates were dropping they were raising the base rate of the APR because "prime" had dropped to low and that wasn't fair to them. I always thought that was bum because that's the point of APR... it goes up, it goes down... but they didn't want to eat the down.
There was a study done, when a store has out of business sale (liquidation) the prices are actually higer on most items than they are in similar stores. Liquidators know that once the news hits that a company is having a going out of business sale so called bargain hunters come in thinking that they are about the get a deal of their life.
Doesn't LG stand for Life's Good? I know it's definitely their slogan. So saying Life's Tough doesn't work - That would mean the company should be LT.
No...LG stands for Lucky Goldstar
i thought it stood for Lezbo Gloryhole
Anyone know where I can get my hands on a 42" Goldstar?
Unlucky Goldstar? UG!
Leprechaun Gonads
Luke's Gonorrhea
Little Gremlins
Los Gatos
Life's Garbage :(
Large Genitalia
Love Gays
Large Genitalia???
i thought LG was from Korea...
that reminds me of a south park episode
I want that picture as my background lol.
oh well hopefully nex year is better.
Doubt it, they were saying the same stuff in 1929
Except this time we're seeing the slow collapse of a debt based monetary system where the debt is so large that it has become unservicable, and all these bailouts and more borrowing are only making the problem worse
I'm an economics student at the University of Texas and I'm both scared and extremely angry right now, I saw this coming around 2 years ago. But that was back when people like Ron Paul and Peter Schiff and others were labeled as nutcases because they challenged the idea that the US economy could grow indefinitely, despite the obvious constraints of energy, available natural resources, etc.
We are in this situation because most countries operate under a monetary system that REQUIRES constant economic growth to be able to service its previous debts. Once that growth is interrupted, the whole system collapses
Thanks Tim. I went over the Crash Course, and it was actually pretty interesting. Now I have to go to sleep because money stuff exhausts my brain. :-)
The key to this, and one of the merchant's nightmares, is being people being happy with what they have. They spend much of their time convincing people that they cannot possibly be happy with what they already have, that they need more stuff.
Agreed. This year I got nothing to buy in electronics except replacing my broken printer. I didn't even buy a memory card this year! I am just happy with what I have, they are not the newest and greatest but still works well. Not to mention most of them are bought within the last 2 years, I guess I've overspent in the past.....
Anyway, here in Canada the deals are equally crap as well. Retailers are giving us the usual crap about the falling CDN dollar so the price they have is the lowest they can get. But hell those inventory were bought months ago under contract when the exchange rate is much better. I would love to see the sales figures after boxing week of those major retails in Canada, and let's make a Canadian version of those funny new logos, they'll need it.
for some companies yes. but not for all. case in point from one of the logos. Apple. my sister was given a new Macbook laptop for Christmas. thing is that the 'rents got her the 13 inch. gave it to her christmas eve. she opened it in the morning and played around with it most of the day and realized that she'd be better off with a pro (she's getting into some video work and might go to film school). she had some money from the grand'rents so crazy as I am, I took her to the mall yesterday to return it.
and get this, not only did they take it back without a fuss, they graciously waived the restock fee, they also hooked up her with a printer that was on rebate so in about 2 weeks it will be free, she was being helped by one of the folks that normally does the training stuff and introduced her to the trainer that does Final Cut at their store (I bought her that year of training so she could have lessons with the woman who was very nice) and last night she dropped off her old Dell laptop and they are going to transfer her files over so at her first session her trainer can show her how Macs organize stuff and help her set up her email etc.
and the place was packed with folks buying iphones and computers with Christmas gift cards etc. but they still spent just over an hour with my sister and didn't make that much more out of it. At one point a manager wandered by and all he did was ask if my sister was in high school or college (if she was in college, he wanted to make sure she got the college student discount on her computer). No "wrap this up and go sell stuff to someone else" nonsense
I'd say at least that location wants folks happy with what they buy
Gotta ditto the Apple story. My 2 year-old MacBook Pro broke down (bad VRAM), and I called Apple up to arrange a repair. The rep on the phone saw my repair history and mentioned that given my previous repairs (with a bad burner and HDD) I would probably qualify for a replacement. Just like that - I didn't have to ask for it, and through that entire call Apple didn't attempt to dodge their responsibilities one bit - quite the opposite in fact.
So I was transferred to level 2 support (less than 5 min wait), where the previous rep described the case to the new guy in my presence, so that we're all up to speed. None of this "repeat what you told the other guy" nonsense.
So 25 minutes after picking up my phone to call them, Apple volunteered to replace my aging 2 year-old laptop with a brand new unibody MacBook Pro. VOLUNTEERED. Didn't have to badger anyone for anything.
I'm now happily typing this on my brand new MacBook Pro, which they shipped overnight btw, and arrived before Xmas :D
I've never gotten that with any other company. When my Toshiba laptop suffered from bad fan bearings (horrifyingly loud grinding noise) they told me it was "usual wear and tear" and would not be covered under warranty. BS. They charge more for extended warranty than Apple to boot.
I have to agree with you guys. My iPod broke down last year, apparently it was catastrophic HDD failure, completely unrepairable (or so I was told). So I took it to the local equivalent of the Apple store, under warantee, and four days later I got a new iPod.
The customer service was exemplary, although they did get rather annoyed when I brought in the same iPod two weeks later, with the exact same problem. And two weeks after that.
And two weeks after THAT.
Turns out they weren't replacing the harddrive, they were just refurbishing it. And when I asked if I could just get a new iPod, they told me roughly; 'Tough titties, be glad we're fixing it after the fourth time.'
@lucas: No wonder they treated you so well, they knew they had a live one!
Upgrade to a much higher margin MBP. A year of lessons? Lessons on basic Mac functionality? (in addition to FCP lessons) Getting them to copy files over?
I know this isn't related, but I'm not seeing any highlighted posts this week, is it something to do with the the website or do I have a problem in my browser??
Looks like Engadget removed Highest/Lowest Ranked again.
You forgot the most important one!
http://home.dejazzd.com/mikesmith/nogadget.jpg
PS3 IS under $300 when using a SONY Visa (no fee/no interest for 12 mos and 1 extra year warranty to boot)
It will be even cheaper than that, in July...
I don't care?
When Life gives you Lemons.....
Kick it in the Balls!!!
they also do not understand that everyone has limits to technology. i heard my nephew say "i don't want any more ipods" he has 4 already yet they still try and tell us all kids need another ipod. guess what after a certain amount of time we have more than enough of them. yes there will always be people who want this toy or that but none have really been that super awesome new tech toy in the past year. there were no real must have toys this year. honestly how many mp3 players does one person really need?
I always have one. When it breaks, I get me a new one.
I thought everybody did it like this. How did he even end up with FOUR ipods?
Probably by not breaking it every year?
with the bail out and recession, I am really surprised by this. though my wife bought tons of stuff, I didnt buy much of anything this holiday season.
Hehe. I love you Engadget. You and your silly images.
gas needs to go up
You're must be out of your mind. If gas goes up, the entire economy, worldwide, will come to a screeching halt. High gas prices was part of what drove the cost of everything up. Now that they're where they should've been all along the Bush administration, we're seeing some relief. Yes, I had to go there because there was absolutely no reason for gas to ever reach over $5 a gallon. The main excuse "economists" used was because China and India were demanding more. Whatever. So what's the reason now? Did China and India suddenly stopped using gas. Please.
I really laughed at the image from the article, nice on this time. At least something to make me smile :)
I was willing to spend but there were almost no good deals this holiday. I don't really need new electronics considering prices haven't changed much in years. The stuff I really wanted either wasn't available or wasn't on sale.
sure but can you stop making light of that poor man's death?...
Recessions suck but they do weed out the bad and lazy companies, like Circuit City. I can't stand Circuit City. Overpriced, bad salespeople and crummy selections. Good riddance. When we do start to come out of this recession, it will happen fast.
When life gives you lemons...you cut them up and squeeze them into other people's eyes...why suffer alone? :D
"When life gives you lemons..."
...add Bacardi.
It should be also noted that the past week, half the country spent their time buried in the most December snow and ice seen in 25-50 years (some people are still digging out). That certainly didn't help things on the retail front (though every sports store in my area sold out of yaktrax really quick :)). A good portion of the last minute christmas shopping just didn't happen, with many family members apologizing and gifting IOUs that are unlikely to actually be filled.
It's not everything, but it made a harsh impact on an already tough year.
I see all these stores doing horribly but then doing nothing about it. Black Friday was a joke considering there was absolutely NOTHING worth sitting out in the cold to buy. Even now, after X-Mas sales have no good deals. If these companies want to make money, they can't just cry about it and expect a bailout. How about actually reducing prices? A 10% profit is better than no profit at all. So let's see 50% off Samsung and Sony HDTV's or some other good deals.
dude, it's not just in the hands of the retailers. when you spend $100 on something, they aren't making $100 dollars. most of that goes to paying for the thing you just bought. so a $100 printer, for example, they might keep $15 of. the rest goes back to HP, Canon etc.
so to be able to cut something down, they have to have gotten a deal from the creator. So when you see that same HP at $50 it's because HP cut them a deal and they only have to send perhaps $40 back to HP and they still have $10 in profit to handle.
remember when the harry potter books were living large. and companies were offering like 40% off if you reserved ahead of time. that's cause the publisher offered them a cheaper price for that first order. they needed those reservations to know how many to order so they didn't under order. cause even if some of the reservations weren't picked up, they had the books and could make a tad more money selling them at the non reservation 25-30% off.
"A 10% profit is better than no profit at all. So let's see 50% off Samsung and Sony HDTV's or some other good deals. "
Okay I understand the whole "Opportunity Cost" concept however it's to the point that marginal benefit equals marginal cost. Not when you loose everything.
When was the last time anything electronic carried 50% margin? 1980's VCRs? Seriously get real. I saw plenty of HDTV's with 25% to 35% off retail- whilst loosing money and giving blu-ray players plus services away. ON top of that, giving CHEAP folks credit and 3 years to pay for it all. There are deals I think people just whine ignorantly some times. You have to draw the line at a "Good Deal" and a "Polished piece of poop".
Customer:
"But the other place's ad says it's a 1080p HDTV LCD, it's a $100 dollars cheaper than your price!"
Salesman:
"But Sir, that other place is advertising a Vizio; have you ever wondered why we don't have cars driving in the US that are made in China? Just because the title says the same things doesn't mean it's the same quality. You're getting what you pay for, you mentioned that you are an average American that absorbs TV forty hours a week, heck you use this Television more than your car from the sounds of it, for 100 dollars more you can get something with ten times the color depth, be set for HD television AND movie watching experience, that matches your needs for (typically watching at night ) INSTEAD of an overly bright image that will give your retinas a burning sensation.
Customer:
"Nah Nah, Plasma's are all crap they go out in a year and burn up, or burn in...Some one from Wal-mart told me that!"
Salesman:
(Walks off from trying to reason with a fool)
Point Taken?
Ignorance is Bliss Right?
Please.
@lucas
Wow, someone actually gets it. I am a small business retailer and customers just can't seem to grasp the concept that unless the manufacturers drop their wholesale prices it is impossible to pass along the savings to the customer. Whether you are dealing with a big box like Best Buy or a small independent retailer, we are all buying from vendors and distributors who are buying from the likes of Sony, MS, Toshiba, etc, etc. who refuse to drop their prices.
On top of that, I think the general consumer is completely warped in their calculation of profit margins for retailers. Just because you see a 25-50% reduction, does not mean they were making that margin plus this theoretical 10%. It is a loss and a necessary one at that in order not to have aging inventory. Inventory 45+ days and your dead.
@Jordan: 50% margins? How about anything Apple
Went to check out a HDTV at Circuit city. They were charging 38% more than everyone else was for the same item, including their own TV ad. When I asked the salesman if that was correct, he replied with; "We can do what ever the hell we want. We're going out of business!". After that response, I'm surprised they made it this long.
This year my mother asked me what new gadget I wanted. Each year she usually buys me whatever electronic toy that tickled my fancy (ipaq pocket pc, zune, ipod, computer etc). This year I responded "I actually still love my ipod touch 1 year later. No I don't want a new phone, Just get me a itunes gift card to download apps"
I guess there isn't any real incentives for people to splurge at "Please Buy" or "Circuit Crap"
When life gives you lemons, you paint that s*** GOLD.
(If anyone gets the reference immediately, you might as well not visit this blog anymore...you're better than that ;P)
Atmosphere, eh? My Grandparents are from South St. Paul, and I tend to spend a good bit of time up in the Twin Cities.
The picture for this article is the best.
...make lemonaide?
The day i put money in these store's hands is the day i cannot find a deal. I could care less about their profits. send them to chapter 11 hell. Maybe then their liquidation will bring better pricing.
You mean you 'couldn't care less', its not 'could care less', as it does not make sense.
No, no. Maybe he could actually care less. But if that's the case, why is he mentioning it? It seems like a trivial thing to say.
When life gives you lemons..YOU PAINT THAT SH!T GOLD
My holiday list - stuff I just got for myself - included a:
Sony BDP-S350 ($180 on Black Friday)
Logitech Harmony 880 ($99 on Black Friday)
Various Blu-Ray Discs (all marked at least 30% off)
Nexxtech Ultimate 10-outlet Power Strip / Surge Protector ($35 on clearance)
A new large suitcase (50% off at Macy's)
About $700 worth of high-end clothing consisting mostly of jeans & sweaters for max $400 (I badly needed a wardrobe overhaul :P)
And my Dad finally entered the 21st century by getting a 46" Sammy Series 6 LCD (saved over $500 w/ sale & coupons) [by the way, this is one of the most beautiful and feature rich TV's I've ever seen. Blows my 2 y/o Sammy DLP away :( - I highly recommend it to anyone in the market.]
I don't know what y'all are talking about when you say there were no good deals... Stores I went to were basically giving away things at cost in order to facilitate cashflow and reduce overhead. Everything I bought was marked down between 30-50%. I perfectly well realize that this was a tough year for a LOT of Americans (and apparently Canadians). But for people who were only moderately affected and tend to ONLY spend money during the holidays (i.e. save the rest of the year), this was one hell of a good shopping season. And I expect it to only get better as we continue the spiral into recession. There's going to be a lot of overstock in Jan/Feb that stores will need to dump. Were talking about 75% savings... probably not in electronics, but wander into Macy's next month and you'll have a field day.
Thanks for the tip about sammy! :)
All great comments.
For me, I am tired of being manipulated in thinking I need all this retail crap when in fact I am probably better off without it. Sure there a new gadget would be nice, but why buy when you know that a better one is just around the corner.
Perhaps if the retailers started focusing on quality, long term ROI and not quantity then I might be persuaded to change my mind.
What happens when everyone buys a great phone that will last 3 years?
The company will go bankrupt, because they'll need to stop the plant, and will have zero sales.
No company wants to change the world. They want money. Constantly increasing flow of money that is increasing faster than inflation.
But did you actually need a feature-packed cell phone ever? You only need a phone that can make calls. By making calls you can run business or meet friends to have fun with them.
The rest? Who gives a damn about that?...
...a shop that wants to sell you something. Don't buy anything till it breaks and you absolutely need a replacement. Lets make large companies go bankrupt together!!! xD
I bet Apple is doing the best out of all those big ones.
For the record, consumer spending is actually up 1.1% when inflation is accounted for (using 2000 as the benchmark). I guess that can't really get in the way of a doom-and-gloom story, though! Gotta drive down that economy somehow!