Posted by: Michael Mandel on December 27
This morning the NYT has an article titled “Major Retailers Feel the Squeeze From Consumers”:
As the nation’s merchants began poring — or weeping — over holiday sales receipts Wednesday, a surprising pattern emerged: even brands that for years have inspired the undying devotion of shoppers felt the pinch of tightening wallets.
Once seemingly invincible marquee chains like Coach, Target, Starbucks and Abercrombie & Fitch are settling for ho-hum growth this winter, after surpassing even the most rosy expectations season after season.
Though they sell very different products, at very different prices, these companies all shared the same bragging rights. Their customers considered them indispensable, even expressions of who they were.
But in this turbulent economy, the indispensable is becoming disposable.
Just one more step down the road to the true consumer crunch, which won’t hit until early 2008, when the credit card companies decide that they’ve had enough losses for now.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.