Retail sales in December rise for sixth consecutive month
Washington, D.C. — Retail sales rose for a sixth consecutive month in December, with big gains in sales of autos and furniture. The increases lifted sales activity for the year by the largest amount in more than a decade.
Sales rose 0.6% last month to a level of $381 billion, the Commerce Department said Friday, less than the 0.8% economists had expected. However, the increase pushed sales for all of 2010 up 6.7%, the largest annual increase since 1999. Excluding autos, retail sales rose 0.5% last month.
December was the best holiday shopping season for retailers in four years. Revenue at stores open at least a year rose 3.8% from Oct. 31 to Jan. 1, according to the International Council of Shopping Centers.
But the gains last month were smaller than the previous two. Retailers began their promotional efforts much earlier this year, which may have dampened last month’s sales. A huge snowstorm in the Northeast after Christmas also reduced demand.
Non-store retailers, which include Internet sales, saw significant sales growth, with sales rising by 2.6% in December following a 1.9% increase in November. The increase in sales by non-store retailers reflected the strongest growth in over two years.
Sales were strong at furniture stores, rising 1%, and at hardware stores, where they increased 2%.
Sales at department stores dropped 1.9% and were down 0.7% at general merchandise stores. The December declines in activity compared to big gains in November.
Union rabble rousing precedes Massmart vote
Dow Jones this morning reported that South African retailer and Walmart takeover target Massmart Holdings has given assurances it will continue to honor all agreements with labor unions and local labor laws if the buyout goes through. That’s what Walmart and Massmart have been saying since the deal was announced last year but they have to keep saying it because union activists are everywhere in the world. In this case, a shareholders meeting is planned for next week to vote on the deal and the union known as South Africa Commerical, Catering and Allied Workers Union had previously indicated it would protest at the meeting. Protest what? Not exactly sure, but a high profile demonstration at a company meeting is an opportune time to put pressure on new owners to offer more generous pay and benefits. To do so, the South African union is trotting out familiar arguments that sound as if they came straight from the playbook of the UFCW, Walmart’s nemesis in the United States. The Dow Jones report said the union had accused Walmart of being anti-union and pursuing procurement policies that are damaging to local suppliers and economies.
Well duh! Of course Walmart is anti-union, but that doesn’t mean it will, or could afford to, disregard prior union agreements. As for its procurement policies, they have been known to have a detrimental effect on some suppliers, but all the merchandise the company sells has to come from some where which means a boon for other suppliers. It doesn’t seem to matter where Walmart goes in the world it is dogged by the same arguments it has heard domestically for decades.
One stop shopping gets new meaning at tax time
Jackson-Hewitt tax preparation kiosks are now open in more than 2,000 Walmart stores in anticipation of an onslaught of consumers eager for their refund to arrive as soon as possible. Nearly half of those who receive a refund get it in February, according to IRS data cited by Walmart, so the retailer is touting the presence of Jackson-Hewitt kiosks in its stores and a preparation fee of $38 for the most basic of returns, the 1040EZ, with only two W2s. According to Walmart research, its customers consider their tax refund check to be their biggest payday of the year and they use the money to pay bills, for savings and to buy necessities.
“We understand that tax time is a good time for our customers, who count on their refund checks and need them cashed right away,” said Jane Thompson, president of Walmart Financial Services. “One-stop shopping at Walmart means you can cash your refund check at the Walmart everyday low price and use the savings to pay your bills, transfer money to friends or family and then save more money when you shop throughout our stores.”
Walmart does offer the lowest fees in the industry, but that’s not hard to do as the typical check-cashing outfits have a reputation for exorbitant fees. At Walmart, it’s only $3 to cash a check up to $1,000 and only $6 for a check up to $5,000. It would seem that anyone who earned enough money to receive a $5,000 tax refund would have a bank at which to cash their check, but that’s another issue. The point is, Walmart could charge higher fees and still be priced well below competitors, but it doesn’t because the customer traffic is more valuable than a few points on the cashing fee. Walmart wants people with their biggest payday of the year in its stores with fresh money to buy things they want in addition to food and consumables.
“Our goal is transparency in pricing as much as possible. It helps people when they know the cost of financial products and services. We are working to make sure that happens for all our money services at Walmart,” Thompson said.