Are Retail Sales Woes a Sign of a Bad Holiday
Personally, I do not see the headlines improving any time soon. Thanksgiving is later than usual this year, causing a shorted shopping period, and I fear that we will see news stories about this being the worst holiday shopping season in decades.
The article noted that among the bigger factors in the numbers were auto sales, but the impact is broader than even that. Consumers are seeking not only value, but affordability. Many auto makers are offering 0%, but the payments can be extensive when the 0% is only good for two or three years. Now more than ever, affordable MONTHLY payments are foremost on the minds of consumers.
In my opinion it is value giving that will be the gift staple this year. Big screen televisions will take a back seat to smaller gifts that represent not only a good deal, but a good value as well. This will present a challenge not only for retailers, but manufacturers that produce the big ticket items.
Unfortunately, consumer confidence is also a factor of the news. As more bad news crosses the wires, people get more concerned, and consumers begin to tighten their belts even further. The bad news becomes somewhat of a self fulfilling prophecy.
For satellite radio, the retail sector has been weak for quite some time, and is already delivering net losses in the subscriber metrics of the company. The holiday season has always been a savior for satellite radio, but what will happen this year. Participation by SDARS in retail holiday specials exists, but there is far less attention than in the past. Instead of a whole section in the Best Buy flyer, there is one small ad for an Xpress unit that is surrounded by iPods, etc.
The combination of a shorted holiday shopping period with a low consumer confidence is almost a perfect storm for bad news. This does not mean that there will be no good plays in the market. Good plays always exist. It is now a matter of which plays will be the real winners.
No matter where you are invested, watch the news closely, and understand the potential impact on investments.
[Associated Press]
Position: Long SIRI.
It is interesting to note, or perhaps instructive, that even in a severely depressed retail environment, Sirius XM still feels confident of having an earnings “positive” Q4.
In a related note . . . I just finished reading the Reuters Company Research analyst’s report.
On Nov. 10 that were rating “Outperform”
On Nov. 11 they were rating “Neutral”
On Nov. 14 they are now rating “Underperform”
These ratings service must not think anyone actually reads the garbage they spew.
Folks . . . go check it out for yourself if you have access. You will see multiple, verifiable, errors in their report. It’s a joke.
p.s.
I do not want to disclose the errors until others have had a chance to look at the report . . . once disclosed, the errors will be magically corrected.
If Reuters is reading . . . I have already printed a hard-copy as well as a “print screen”
This “holiday” season for retail is going to be an absolute disaster. That’s to be expected for Sirius/XM; they don’t advertise, most people don’t even know that they merged, and the 43 cents a day is a dealbreaker for all of those people who have to make sure they can pay for the necessities in life; you know….. cable TV, cell phones, computers and video games, I-pods, bottled water, booze, lap dances, Starbucks, $60 haircuts, and keeping the bitches happy.
Merry Christmas
you would think if they slashed their ad budget to a minimum, they would be smart to spend it all on the holiday season as this is their best chance to ad many subs–There is no display, promotion or any eye catching option at Best Buy, CC etc–In the past, their would be reps visiting stores, setting up premade displays, working with the management–Now at Best Buy, the units are hidden in the back with the car stereos–Not good