Retail’s new normal
Retail sales numbers released Wednesday from the Commerce Department suggest consumers spent slightly less in September than the month before.
There were some bright spots in the electronics category, and overall gains from the same period last year. Still, the headline numbers might give retailers some anxiety heading into the holiday season, says Georgetown University professor Marlene Morris Towns.
“I think that retailers are really, really, kind of struggling to get people in, to get people shopping,” she says. “I think they’re pushing to holidays on us faster and faster.”
But Towns is optimistic about consumer spending going forward.
It’s just that we have to take into account the economy’s new normal, says Susan Viamari, who tracks consumers and retail trends for IRI. “The new normal is going to be much more conservative mindset than what we saw before that proverbial bubble burst.”
Viamari says many consumers who cut back during the recession are keeping a tight grip on their spending.
Compare that with a decade ago, RBS Securities economist Omair Sharif says, when homeowners were pulling equity out of their homes or using credit cards to fuel shopping sprees.
“So it’s just a very different environment in terms of your ability to finance your expenditures,” he says. “It’s just night and day versus 2004.”
Consumers are largely limited to spending what they have, says Sharif, and he doesn’t expect that to change anytime soon.
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