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IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!

 
Anonymous Coward
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08/27/2009 11:20 AM
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IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
[link to finance.yahoo.com]

In the Tank Forever": U.S. Consumers, Retailers in a "Death Spiral," Davidowitz Says

Posted Aug 27, 2009 07:30am EDT by Peter Gorenstein
Related: DLTR, FDO, SPY, KSS, XRT, WMT, CVS
Retail maven Howard Davidowitz paid another visit to Tech Ticker this week. And despite signs of improvement in consumer confidence and retail stocks rising, Davidowitz is steadfast in his belief the consumer is dead.

Rather than summarize, let me just highlight some of his best one-liners:

On retail:
"The retail business is terrible... It's almost all negative."
"We're going to close hundreds of thousands of stores."
On the consumer:

"They’re still over leveraged, they're losing jobs, their credit has been cut back."
On America:

"We are in the tank forever. As a country we are out of control, we're in a death spiral."
On the stock market:

"We're in terrible shape. That's what the fundamentals tell me. I can't explain the stock market."
But it's not all gloom and doom, believe it or not. Davidowitz, who runs a retail consulting firm Davidowitz and Associates, thinks certain discount retailers, grocers, drug store chains and a select few department stores can survive and prosper in the future.

Most notably he likes the "extreme discounters" like Family Dollar, Dollar Tree (which was up almost 5% Tuesday after the company raised its outlook) and 99 Cents Only Stores. And, in the department store sector, he says, Kohl's will "be the only winner" because of their cost controls. (Davidowitz has no positions in stocks mentioned.)
Anonymous Coward
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08/27/2009 11:24 AM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
So True..................


.
Anonymous Coward
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08/27/2009 11:38 AM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
Both the Republicans and Democrats have destroyed this nation. They wanted something for nothing, they wanted to take, take, take, and now they've doomed billions to slavery and poverty.

They will just blame each other to ease their conscious. They will be right though that they are both to blame. A rare occasion, them both being right.
ac
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08/27/2009 11:45 AM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
I can explain the stock market during the last several months: TARP money and outright manipulation. It is amazing what a few trillion will do in the hands of a few well placed banks 'too big to fail!' Long time traders and investors have never seen the market behave in the manner it has since the rocket shoot began on March 6th. Market participation by money on the 'sidelines' i.e. money being held in money market funds has been about 10% which indicates that particpation in the next 'bull' market hasn't been widespread.

The Bloomberg FOI lawsuit is extremely important in letting the American people know how their tax money was spent, despite what Geithner claims. Where is all the tranparency that the Obamao administration originally promised? The Dems and GOP are two sides of the same coin. We have been lied too for way too long by both sides....
Anonymous Coward (OP)
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08/27/2009 11:58 AM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
I can explain the stock market during the last several months: TARP money and outright manipulation. It is amazing what a few trillion will do in the hands of a few well placed banks 'too big to fail!' Long time traders and investors have never seen the market behave in the manner it has since the rocket shoot began on March 6th. Market participation by money on the 'sidelines' i.e. money being held in money market funds has been about 10% which indicates that particpation in the next 'bull' market hasn't been widespread.

The Bloomberg FOI lawsuit is extremely important in letting the American people know how their tax money was spent, despite what Geithner claims. Where is all the tranparency that the Obamao administration originally promised? The Dems and GOP are two sides of the same coin. We have been lied too for way too long by both sides....
 Quoting: ac 137597



YOU CAN'T CONTROL THE MARKET FOREVER !!

iamwith
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08/27/2009 12:06 PM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
My wife and I had plenty of left over discretionary spending money after we skipped the car payments for this month LOL.
ac
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08/27/2009 12:14 PM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
You know, you're absolutely right. I haven't missed nor had a late mortgage payment in 19 years but I have seriously considered just saying "F" it and just quit paying lately. All these government programs do nothing but encourage one to just stop the nonsense. I could probably live in the house for at least two years before anything was done, as for the bank to start a foreclosure would force them to acknowledge a loss on their books, which they are redfusing to do with many homes now currently in foreclosure. That would leave a lot of discretionary money to be spent helping out our consumer based economy!
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08/27/2009 12:44 PM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
This is absolute bollocks; all of it.

I have worked in the 'asset value recovery' business (for a company in London). It really opened my eyes and alarmed me. In the UK too these discount stores are doing very well right now; in fact stores like 'Poundland', 'Bargains and More' and the '99p Store' are booming and forcing regular retail store to shut left right and centre.

Now, many consumer groups are loving this; afterall its 'stopping consumers from being ripped off' and enabling 'affordable shopping' etc...

BUT THERE IS A HUGE PROBLEM! Its a problem that 99.99% of people, including many anaylsts and journalists, seem blisfully unaware of. I'll explain:

Have you ever wondered why these discount stores can sell quality products, including many branded items, at such low prices? Most people think its because they save on staff costs and don't really spend much merchandising their product displays etc... well, thats true to an extent, but a very limited extent.

These discount retailers get their stock from huge distribution companies. In the UK thats companies like Wincanton who take care of logistics for massive retail stores like Tescos, Debenhams and alike. When these regular retailers over-order they get Wincanton (or whichever logistics company they use) to store the exra pallets in their warehouses. Also when these retailers get returns, they don't normally put them back on their shelves, rather they may check them, then they send them back on pallets to the distribution company. The distribution company, such as Wincanton, then stores these excess pallets of products for the retailer, but it charges them a monthly fee to 'park the pallets.' Obviously the retailer wants to minimise this fee so they tell Wincanton etc to dispose of the pallets.

Reps from these discount stores then go to these warehouses and buy the palletised 'overstock and returns' for a fraction of their true value. They may pay just £20 for a whole pallet. These pallets only have a vague description, so 'Bargains and More' may pay £20 for a shrink-wrapped pallet of 'Home Electronics.' They don't know exactly what they are getting until they get the pallets back to their own warehouses and unwrap them. This is the reason why although these discount stores sell branded products, they rarely have steady lines that you can count on always being there.

Of course, they also do the same with bankrupt stock. But my point is, and here is the important and alarming part:

Without a majority of retailers being 'full-price' retailers, ordering and paying cost prices for the good in the first place, then there will be no pallets full of 'overstock and returns' for these discount stores to snap up, break up, and sell on at silly prices.

Basically, discount stores are a one-way ticket to commecial doom. They thrive now but when they can't get overstock and returns from the regular retailers (via the logistics companies), then there won't be any way on Earth they can sell for such low prices. They will either go out of business or have to raise their prices and thus become regualr retail stores.

DISCOUNT STORE ARE NOT REALISTIC; YOU PAY LESS THAN COST - IN EFFECT THE CUSTOMERS OF REGULAR RETAIL STORES ARE SUBSIDISING DISCOUNT STORE CUSTOMERS!

ITS ABOUT TIME PEOPLE USE SOME BLOODY COMMON SENSE AND REALISE THAT THIS DRIVE FOR 'BARGAINS' IS HALF OF WHAT GOT US IN THIS MESS!!

URGHH!! NO ONE WILL LISTEN UNTIL ITS TOO LATE.
Anonymous Coward
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08/27/2009 03:41 PM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
"This is absolute bollocks; all of it"

Great post
UNtypical USer

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08/27/2009 03:47 PM
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Re: IN THE TANK FOREVER : U.S CONSUMERS , "RETAILERS IN A DEATH SPIRAL "!!! EXPERT SAYS !!
There's no such thing as "cheap."

There's giving things away nobody wants.

There's paying the cost of manufacturing.

That's all there is.

When NO MORE is being manufactured because the manufacturer went out of business, there's nothing more to give away.

Ta-dah!

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