Wholesales Sales Drop By Most Since March 2009; Relentless Inventory Accumulation Continues

Tyler Durden's picture


The relentless warehousing of wholesale inventories continues, even if the "any minute now" gusher of wholesale sales continues to be pushed back into the indefinite future. Sure enough, the March data showed that wholesale sales disappointed, and instead of growing 1.5%, declined by -1.6%, below expectations of a 0.1% rise. This was the biggest drop in sales since March of 2009: another nail in the coffin of any recovery dreams. That this happened even as inventories increased by more than the expected 0.3%, or 0.4% up from the previos decline of -0.4%, shows that indeed the end-demand weakness has been quite widespread. Logically, the Inventory-to-Sales ratio rose to 1.21, up from the 1.17 a year ago, and the highest also since 2009. Sooner or later all this pent up inventory will have to be cleared, resulting in even more dumpin, price reductions and margin deterioration in a retail world in which the bottom line is more elusive now than it has ever been: just ask Amazon.

Inventory to Sales keeps rising:

And the one place where things are about to get fun: the warehousing of clothes as represtned by retail clothing & accessory inventory to sales ratio. One wonders how long until companies like JCP throw in the towel and commence wholesale liquidation, thus crushing their secured debt eligibility?

Full report here

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Thu, 05/09/2013 - 10:26 | 3544462 orangegeek
orangegeek's picture

Does China's inventory of empty cities count too?

Thu, 05/09/2013 - 11:16 | 3544672 camaro68ss
camaro68ss's picture

Higher inventorys mean more products to sell. BULLISH


Thu, 05/09/2013 - 11:34 | 3544737 SunRise
SunRise's picture

Yes - that's where the clothes are stored

Thu, 05/09/2013 - 10:26 | 3544463 Cursive
Cursive's picture

This goes hand-in-hand with the decrease in revolving credit, not that I believe any of the econometric lies.  Anecdotally, I can see and feel the pain on Main (Street).

Thu, 05/09/2013 - 10:28 | 3544469 Temporalist
Temporalist's picture

Must stock up to be prepared for the mass rush of Amerkian Consumerists.  Recovery is just another word for nothing left to lose.

Thu, 05/09/2013 - 10:30 | 3544480 Cursive
Cursive's picture

RE: Clothing Boycott

I'm waiting for the Fall rollout of the Serf Tunic.

Thu, 05/09/2013 - 10:33 | 3544500 All_Is_Well
All_Is_Well's picture

+1 great line

Thu, 05/09/2013 - 10:36 | 3544510 Temporalist
Temporalist's picture

Maybe that is appropriate for you fancy bourgeois types but us serfs are happy that our cardboard boxes work as both clothing and shelter.

Thu, 05/09/2013 - 10:46 | 3544563 new game
new game's picture

oboms boxes and tunics and chicks for free...

Thu, 05/09/2013 - 10:30 | 3544485 Jason T
Jason T's picture

U.S consumer is utterly spent.   Piss poor savings rate, real disposable income is stagnent to falling and employment report was horrendous ..hours dropped was a big deal so weekly earnings fell.  

Thu, 05/09/2013 - 10:34 | 3544506 ejmoosa
ejmoosa's picture

...not to mention that if I needed it I'd already have it.  

Thu, 05/09/2013 - 10:39 | 3544522 insanelysane
insanelysane's picture

The consumer is simply waiting for the government to pass the internet sales tax law before buying.  It would be un-American to do otherwise.

Thu, 05/09/2013 - 10:31 | 3544490 youngman
youngman's picture

I am glad to see the Joe on the street is starting to get it....seeing thru the lies and doing what is right...wonder when the politicians will see the light and start slowing down the spending......never i know...never

Thu, 05/09/2013 - 13:01 | 3545068 seek
seek's picture

This has more to do with them seeing empty wallets and bank accounts than seeing through the lies. In the end, though, it does lead to them waking up to the fact they've been used just the same.

Thu, 05/09/2013 - 10:31 | 3544492 Marley
Marley's picture

John Galt has been a deadly and destructive guy lately!



Thu, 05/09/2013 - 10:32 | 3544495 Cognitive Dissonance
Cognitive Dissonance's picture

Ignore that plummeting macro data behind the curtain. I am the all mighty QE.

<I need moar power Scotty.>

Thu, 05/09/2013 - 10:56 | 3544598 forwardho
forwardho's picture

+1  For use of Startrek and Wizard of Oz in same comment.

Not many could pull this off.

Thu, 05/09/2013 - 10:32 | 3544498 CaptainSpaulding
CaptainSpaulding's picture

I don't see my Lazy boy purchase on the chart. Doesn't that count?

Thu, 05/09/2013 - 10:35 | 3544509 101 years and c...
101 years and counting's picture

lowered prices = DEFLATION.  ben fucking loses.  i just hope he stays on as fed chair so he can be there when the marriner building is burned to the ground.

Thu, 05/09/2013 - 10:38 | 3544520 the not so migh...
the not so mighty maximiza's picture

Its going to be like one of those action flicks, Bernanke walking with a mean look on his face as the buuilding explodes behind him.

Thu, 05/09/2013 - 10:48 | 3544572 the grateful un...
the grateful unemployed's picture

so Ben throws them more ZIRP, they buy back more shares, and make money through financial engineering, rather than sales. recall a few years ago Alcoa had one of their best quarters ever, they closed an aluminum plant and sold the electricity they had bought as a future contract back for a huge profit.

Thu, 05/09/2013 - 10:41 | 3544535 BooMushroom
BooMushroom's picture

Amazing to me that (this particular) Tyler has all this access to these genuinely awesome economic charts (seriously, I don't know if I could find this data without ZH) but can't seem to locate a spell-checker.

This is the main reason I believe the rumors of multiple Tylers.

Thu, 05/09/2013 - 10:44 | 3544551 Temporalist
Temporalist's picture

Go fcuk yoursefl!

Thu, 05/09/2013 - 10:48 | 3544571 insanelysane
insanelysane's picture

Had this thought this morning and it still sounds rationale after a few hours so here goes.

How absurd is it that the financial systems are controlled by high frequency trading that work in milliseconds after processing "new" data that reflects what happened 6 weeks ago?  Even the Thursday jobs report is 6 days old.  How many milliseconds is that?

Thu, 05/09/2013 - 10:52 | 3544588 Son of Loki
Son of Loki's picture

I have two relatives into sales and they both say it's "grim." They are both saving every penny for very serious slowdowns.....so they are not thrown out of their homes.....it's getting worse out there for many sectors....

Thu, 05/09/2013 - 10:53 | 3544592 the grateful un...
the grateful unemployed's picture

the Feds chart allows them to buy any sort of asset, even fashionable assets.

Thu, 05/09/2013 - 10:53 | 3544593 Seasmoke
Seasmoke's picture

Just hold on to all that inventory until the Internet sales tax is passed. Then it will all work itself out.

Thu, 05/09/2013 - 10:54 | 3544599 W T F II
W T F II's picture

Deflationary Depression

Thu, 05/09/2013 - 11:32 | 3544618 chdwlch1
chdwlch1's picture

Good thing they're changing the formula to calculate GDP to include 'promises' of employer pension contributions or the next GDP number might suck...

Thu, 05/09/2013 - 11:01 | 3544625 Stormtower
Stormtower's picture

I love Craigs list. Just picked up a beautiful dining room set....high top mahogeny w/4 chairs.........$125 bucks. Shopped the furniture stores in town, couldn't even find a POS for under $500.00.......

It takes some doing, but there are sooooo many desperate people selling their goods it's astounding. Last year we got a nice secretary desk and chair off C.L. Asking $250, when we got there, the two "crackheads" needed a fix so bad...I told them all I had was $50 cash.......they pounced!

It makes no sense to buy anything new.......except a mattress......

Thu, 05/09/2013 - 11:09 | 3544654 Bay of Pigs
Bay of Pigs's picture

On the flip side, I put a rare gold coin on there awhile back just to see what would happen and I had zero offers in three or four weeks.

It was fairly priced too.


Thu, 05/09/2013 - 11:18 | 3544681 The worst trader
The worst trader's picture



Thu, 05/09/2013 - 11:26 | 3544707 yogibear
yogibear's picture

Haha, not for long.

No matter what they have to take the market higher.

Thu, 05/09/2013 - 13:09 | 3545103 SheepDog-One
SheepDog-One's picture

Certainly not for long, damage control team just ruched in and added a couple billion Bernank Clownbux all is well.

Thu, 05/09/2013 - 13:08 | 3545098 SheepDog-One
SheepDog-One's picture

Wow I sure hope all this 'inventory' has a VERY long shelf life! 

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