Earn What You Spend

Black Friday turned out to be more successful than most had thought - retail sales had jumped 3% from the year before.  Anything that shows growth instead of a contraction can surely be counted a success. 

But is it enough to save retail this quarter? It doesn’t look like it.  According to new data released by MasterCard SpendingPulse, November was a brutal month for virtually every retailer. 

Sales fell 20% from year-ago levels at apparel and department stores combined, 24% at luxury stores and 25% at electronics stores, according to the MasterCard Inc. unit.

Historically, a number of luxury items have been able to weather contractions in consumer spending such as this one pretty well - the demand for their products would not dip as sharply.  Not so this time around: “‘the farther you go up the price spectrum, the more significant the declines” in sales, said Michael McNamara, vice president of SpendingPulse.”

It’s still shopping season, so it’ll be important to keep a close eye on all the Q3 earnings reports coming out in the next few weeks.  They are certain to be quite instructive.