by Calculated Risk on 11/30/2008 02:59:00 PM

Some anecdotes from the Financial Times: Black Friday sales suggest longer stay in red (hat tip Mark)

[B]y FAO Schwarz, the queue stretched half way along the toy store. “Usually it’s all the way around the block,” said Ariel, manning a stand selling fluorescent paintings of nearby landmarks, who estimated his own sales were down 70 per cent.
...
The thin crowds allowed tourists to take photographs of each other posing in front of Tiffany & Co’s fir-lined windows and Bergdorf Goodman’s display of boxing polar bears without the inconvenience of having to wait for other shoppers to pass. Tiffany’s main floor was unusually calm.

Janet Hoffman, managing partner at Accenture’s North American retail consultancy, said that initial reports from around the country suggested that shoppers were focusing on basic items rather than luxuries, and were hunting out discounts.

And from Reuters: US holiday sales view still weak after weekend rush (hat tip Joshua)

[A]n early rush to stores was ... not likely to change a weak outlook for the season, analysts said on Sunday.

Early results from the Black Friday weekend, which begins one day after U.S. Thanksgiving, showed that sales grew both in stores and online.
...
[Richard Hastings, a consumer strategist with Global Hunter Securities LLC] still expects total retail sales over the holiday period of November, December and January to fall 6 percent to 8 percent from last year.

by Calculated Risk on 11/30/2008 01:58:00 PM

This is a pretty optimistic take from the National Retail Federation: NRF Survey Finds Black Friday Gets Holiday Season Off to Energetic Start

Though the holiday season is far from over, retailers across the country are breathing a collective sigh of relief after shoppers headed to stores and websites in droves over the weekend. According to the National Retail Federation's 2008 Black Friday Weekend survey, conducted by BIGresearch, more than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year.*

Shoppers spent an average of $372.57 this weekend*, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion.

"Pent-up demand on electronics and clothing, plus unparalleled bargains on this season’s hottest items helped drive shopping all weekend," said NRF President and CEO Tracy Mullin. " Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again."

Friday was clearly the busiest day of the weekend with 73.6 million people hitting stores and websites for doorbuster sales. Though traffic did subside after Friday, retailers were also buoyed by two-day sales as 56.9 million people shopped on Saturday, up from 48.3 million last year, while another 26.2 million people planned to shop on Sunday. Thanksgiving Day also continues to increase in importance as the number of people who shopped on Thursday was up 48 percent over last year (16.2 million people vs. 10.9 million people).
...
Bargains appeared to be so good that people have more of a jumpstart on shopping. According to the findings, Americans have completed more slightly shopping than they had one year ago (39.3% vs. 36.4%), indicating that traffic and sales over the next several weeks will moderate.

"Though retailers should be encouraged by strong traffic and sales over the weekend, consumers are still being cautious," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Weekend shoppers indicated that they are still sticking to a budget and thinking carefully before making any holiday purchases."
...
NRF continues to project that holiday sales will rise 2.2 percent this year to $470.4 billion.
...
*Spending data includes Thursday, Friday, Saturday and projected spending for Sunday.

by Calculated Risk on 11/30/2008 11:37:00 AM

From MarketWatch: Black Friday sales chalk up 3% gain from last year

Strong discounts brought U.S. consumers to the stores on "Black Friday" ... with estimated sales rising 3% from last year, according to industry analyst ShopperTrak RCT Corp.
...
"While this is an encouraging start for retailers, there's no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending," said Bill Martin, co-founder of privately-held ShopperTrak.

"Additionally, consumers have just 27 days to shop this year as opposed to 32 in 2007, which may catch some procrastinating consumers off guard, leading to lower sales levels," he said.

Key points:

Although sales were up slightly, this was due to some heavy discounting (that might not continue).

this will be a short shopping season.

by Calculated Risk on 11/29/2008 09:17:00 PM

Just returned from Joshua Tree (awesome trip)....

From the LA Times: Black Friday shoppers spend -- with caution

Holiday sales grew 2.4% to $460.2 billion last year compared with the previous year, according to the National Retail Federation. Many retail experts are now saying that if this season's sales figures are comparable, it will be a good year.

And although thousands of shoppers hit the stores across Southern California, industry experts worried it still wasn't enough to save Christmas.

"I don't think the holiday has a chance at all. No way," said Marshal Cohen, chief industry analyst at market research firm NPD Group. "This year, that spirit is gone."

Desperate for a strong day of sales, retailers took no chances and opened their stores earlier, slashed prices even further and offered discounts on entire purchases.

"Everything seems like it's 50% off or 2 for 1, or they're running specials until noon," said Jackie Fernandez, a retail partner at accounting firm Deloitte & Touche, who was at Glendale Galleria to survey the action. "It's just endless."

From the WSJ: Shoppers Hit Stores but Mood Is Subdued

Black Friday's impact has been muddled this year by a month-long blitz of early promotions by retailers hit by shoppers' penny-pinching tendencies amid the economic downturn.

The early number are always a little confusing, but this is a short buying season, and retailers are discounting heavily, so I expect the numbers to be dismal.

by Calculated Risk on 11/29/2008 08:22:00 AM

I've written several times about Temecula as an example of exurbia in California.

Look at Temecula on this map. San Diego is far to the south - living in Escondido is a tough enough commute to work in San Diego. And Orange County is an even more difficult drive to the west.

Note: you can move the map around to see the relationship of Temecula to San Diego, Riverside and Orange County.

My earlier posts focused on housing in Temecula, but one of the key industries in exurbia has been ... what else ... construction. So not only are a large percentage of the homes in foreclosure, but commercial real estate is getting hit especially hard.

From the North County Times: Report sees rising office vacancies in 2009

The Grub & Ellis/BRE Commercial report said the space glut will really take hold in the Temecula Valley area, which has had an especially heavy emphasis on real estate-related office tenants.

At the peak of the market, around 2006, 45 percent of Temecula Valley office tenants were escrow, real estate, mortgage and title companies, said Mark Esbensen, a Grubb & Ellis managing director who helped prepare the report. Much of that space is now being vacated.
emphasis added

by Calculated Risk on 11/28/2008 09:27:00 PM

And for some reason, a little U2 from The Joshua Tree:

by Calculated Risk on 11/28/2008 04:30:00 PM

I'm lost in the middle of the Mojave desert (not really lost - just hiking) - so I might lose my connection. Here is the site to check for bank failures.

The FDIC main page.

And the Failed Bank List.

Since the FDIC closed three banks last week, my guess is there will be no closures this week.

by Calculated Risk on 11/28/2008 10:35:00 AM

From the WSJ: More Risks in Store for Retailers

Friday could be black for retailers in more ways than one. Traditionally it is the day that retailers start to break even for the year. This time it could be the moment when some accept reality and start making plans to scale back.

For those that do, there is a serious concern: exposure to long store leases.
...
In strong markets, leases can be sold to new occupants. When replacement tenants are scarce, however, landlords often extract a hefty fee to break a lease.

This is definitely not a strong market - and trying to downsize could be costly for some retailers. Between a rock and a hard place ... maybe Black Friday will bail them out.

by Calculated Risk on 11/28/2008 09:10:00 AM

"Conditions have deteriorated on a scale and with a speed that no one could have predicted just a few months ago. Market conditions of unprecedented strength are roiling the world's financial markets. The global economy is either in, or close to, recession and 2009 is not likely to be a year of great recovery."
Brett White, president and chief executive officer of CB Richard Ellis, recent letter to clients, from the LA Times: CB Richard Ellis feels industry's pain

And a few months ago White wasn't exactly optimistic:

“Decreased investment volumes have now become evident in all parts of the world. ... I can best describe the current environment as being very challenging and still having a high probability of getting worse before we see improvement."
Brett White, president and chief executive officer of CB Richard Ellis, July 30, 2008

by Calculated Risk on 11/28/2008 01:11:00 AM

This is in three parts (each part 10 minutes). The other two parts are here.