RANTING ANDY – Here we go again!
One day of rising stock prices, care of a spirited, PPT-aided media attempt to spin “Black Friday” and “Cyber Monday” as symbols of meaningful progress, and the news is abuzz of “green shoots of recovery.” Due to the factors listed in yesterday’s RANT, I take the opposite view entirely. In other words, if “Black Friday” and “Cyber Monday” sales are so strong in an environment of deep economic decline, plunging stock markets, and record-low consumer sentiment, then something far more ominous than what we have seen to date is at play.
I believe the main reason for such strong early-season sales is that it has simply become a trend to shop earlier than in the past, particularly when “doorbuster” sales (I get ill writing that word) might ease the cost burden. Retailers are in desperate straits, as for most, their ENTIRE year’s profitability is earned during the holiday season. Thus, the urge to grab as high a market share of this year’s scant retail buying power is powerful, even if obtained at the expense of profits, which will surely drop this year due to the weak margins resulting from deep discounting.
If there’s one thing I’m positive of it’s that, at best, strong “Black Friday” sales are meaningless, and at worst, a symptom of further desperation on the part of both cash-strapped buyers and profit-starved sellers.