FINANCE

ARG: Holiday credit-card debt to drive down January and February sales

BY Marianne Wilson

Charleston, S.C. — January post-holiday sales will plunge to some of the lowest levels in years thanks to a surge in credit card spending over the Christmas season, according to consumer research firm America’s Research Group (ARG).

"Now that those credit card bills are hitting mailboxes, shoppers will cut back in a very significant way relative to January and February of the last few years," said Britt Beemer, chairman, ARG.

According to Beemer, Black Friday was so big that Americans in record numbers, with 43.8% saying that they exceeded their spending limits.

“These numbers are much higher than the 15% and 16% that signaled major drops in credit card usage that we’ve seen in the last couple of years. Americans now face the challenge of bigger credit card debt until they get their income tax refunds – but, regardless, spending levels will drop for at least the month of January as the sticker shock hits big-time,” Beemer said.

"The other reason for the suddenly higher credit card debt, according to Beemer, is the increase in online spending which is totally credit driven.

“It was 10 points higher – it went from 16% to 26%,” he said.

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OPERATIONS

Report: Sears arms associates with iPads and iPod touches

BY Staff Writer

New York City — Sears has given store associates more than 5,000 Apple iPads and 11,000 iPod touches to track inventory and customer orders, Lou D’Ambrosio, CEO, Sears Holdings Corp., said in a Bloomberg report.

In the article, D’Ambrosio also took on critics who have complained that Sears has not invested enough in its stores. The chain is spending less than a quarter of the $8 per square foot that retailers typically invest to maintain stores, according to International Strategy & Investment Group, according to the report.

“Sure we want to have stores that look nice so we’re investing in fixtures, paint and new designs but store appearance in itself isn’t enough,” D’Ambrosio said. “Borders had great bathrooms but that didn’t help them because they missed the e-book revolution in their industry.”

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REAL ESTATE

Grubb & Ellis: Continued sluggish real estate recovery in 2012

BY Marianne Wilson

Santa Ana, Calif. — The struggling housing market, weak job growth and ongoing consumer deleveraging caused the retail market to lag other property sectors in 2011, according to Grubb & Ellis Co.’s 2012 National Real Estate Forecast, which predicts a year of slow but continued growth for all commercial real estate property sectors.

"Although a variety of economic and political factors, including continued high unemployment, an upcoming U.S. presidential election and the unresolved European sovereign debt crisis weigh on the minds of real estate owners, users and investors, we anticipate gradual improvement in leasing markets and a boost in investment sales volume," said Robert Bach, senior VP, chief economist. "This is based on an assumption of GDP growth in the range of 2.0% to 2.5% in 2012, still below the economy’s long-term potential of around 3%, and an average of 125,000 net new payroll jobs per month."

In the retail sector, demand from mid-size tenants was limited and the majority of transactions were smaller deals in 2011, according to the forecast. Neighborhood and community center vacancy rates were stable but not falling, while vacancies in regional malls inched up slightly. Regions scoring highest on the Momentum Index, which places them in the top quartile of markets analyzed, include Southern California and Northern California/Pacific Northwest.

The bottom quartile included the Mountain/Southwest region, where the housing bust was particularly severe, and the Great Lakes/Ohio Valley.

The majority of investment activity has been in larger, primary markets, while tertiary markets have seen little capital for deals. The results of the Investment Opportunity Monitor indicate that this trend will continue. Los Angeles topped the list, followed by Washington, D.C. (No. 2), Boston (No. 3), San Diego (No. 4), Seattle (No. 5), Portland, Ore. (No. 6), San Francisco (No. 7), Houston (No. 8), San Jose-Silicon Valley, Calif. (No. 9), and Austin, Texas (No. 10).

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