Bah, humbug! Investors in the retail sector should be forgiven if they periodically sniffle this phrase.
It hasn't been a stellar year for most of the big-name retail shops. Macy's
As the all-important holiday spending season -- when big retail chains typically hope to rake in up to 20% of their entire yearly revenue -- draws to a close, some signs point to what could end up being the slowest holiday spending season since 2002, when consumers were still reeling from the bursting of the dot-com tech bubble.
In response to lackluster sales, which UBS Securities says rose a mere 2.8% over the 2006 season, some of the nation's largest retail chains are rolling out massive post-Christmas price cuts to lure shoppers back into the stores. There's an estimated $25 billion in gift cards waiting to be redeemed. Did I say discounts? Let me take that back ... I meant an all-out fire sale.
Fire in the hole!
Earlier this week, Saks Fifth Avenue
Such eye-popping sales certainly keep the sleigh bells ringing for shoppers looking to snag a bargain, but they could spell trouble for investors, who have already been punished by lagging sales. The S&P 500 Retailing Index slipped 17% last year, versus a 3% increase for the S&P 500 average.
While post-holiday sales are standard, slashes of this magnitude may signal something closer to a desperate cry for help rather than a dose of holiday giving from retail outlets. Earlier in the week, retail giant Target announced that same-store sales growth may in fact decline in December, after it had forecast sales growth of up to 5% for the month. Ouch.
Perhaps the one glimmer of consumer hope comes from online retailer Amazon
Keep a watchful eye on big retailers throughout 2008, as their performance will shed light on the pulse of the consumer, and ultimately the health of the economy.
And for related retailing Foolishness:
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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. He appreciates your questions, comments, and complaints. The Fool's disclosure policy made it through the holiday season without receiving one speck of coal.