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This Is What Keeps Retailers Up At Night

Tyler Durden's picture


The government shutdown has removed key algo-dependent headline-making economic data from our daily lives such as incomes, spending and retail sales. However, we have anecdotal signals from trade industry data (pace of dining out has stalled and anyone but the hghest earners are seeing consumer comfort plunge) and from-the-horse's mouth we have CEO comments. Here is what is on the US retailers' mind...


Via Bloomberg's Ric Yamarone,

Chico’s FAS [CHS] Earnings Call 8/28/13:

Traffic was our issue in quarter two. In a highly promotional and challenging environment, comparable sales result was a negative 2.6 percent on top of a positive 5.6 percent last year and a positive 12.8 percent in 2011.”

William-Sonoma [WSM] Earnings Call 8/28/13:

The retail environment, it seems to indicate there’s still a lot of uncertainty out there, that the promotional environment has not gone away and that the retail environment in general continues to be choppy, especially with the recent earnings releases and this global unrest, and we just don’t want to get ahead of ourselves.”

Zale Corp [ZLC] Earnings Call 8/28/13:

“Overall, we continue to take a conservative view of market conditions in both the U.S. and in Canada. That being said, we do expect to continue to achieve positive top line growth. We expect store closures will impact our overall revenue growth for the year by about 250 basis points. It represents net closures of approximately 50 to 55 retail locations.”

DSW Inc. [DSW] Earnings Call 8/27/13:

We did have a traffic decline in Q2, sort of similar to what just about every other retailer in America has reported.”

Guess? [GES] Earnings Call 8/28/13:

“The Korean business continued to be strong as revenue grew in the high single digits in local currency during the quarter. This was offset with the weakness from China, where we are seeing clear evidence of a pullback in consumer spending behavior because of the slowdown in the economy.”

Aeropostale [ARO] Earnings Call 8/22/13:

“Our business trends in the second quarter did not change materially from earlier in the year, which was disappointing given the level of change we registered with the brand. This performance in the third quarter outlook is being influenced by a challenging retail environment, with weak traffic trends and high levels of promotional activity.

Dollar Tree Inc. [DLTR] Earnings Call 8/22/13:

“In our current economy with customers facing stubbornly high unemployment, unpredictable fuel prices and higher taxes people continue to look to Dollar Tree as a destination for a balanced mix of high value consumer products and a terrific assortment of fun, high value and high margin variety merchandise.”

Hormel Foods [HRL] Earnings Call 8/22/13:

“The weakness for Refrigerated Foods was clearly the most pronounced in the earlier part of the quarter, ending up prompting us to come out with our guidance adjustment that occurred mid-quarter. At that stage, we were seeing some continued weakness in processing margins, but the bigger culprit had been the spike in some of the raw material costs.”


and all of this before the government managed to shutdown the government and furlough hundreds of thousands of workers...

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Mon, 10/07/2013 - 08:42 | 4029818 DaddyO
DaddyO's picture

So when are retailers gonna put pressure on the Politicians and Banksters to change monetary policies and put people back to work?

Whant to iimprove retailers bottom line? End the FED?


Mon, 10/07/2013 - 08:48 | 4029834 Dr. No
Dr. No's picture

Ha!  Havent you heard, furloughed employees get back-pay.  Now they can stay home and go to the mall.  Coupled with EBT/Snap, etc, retailers are having wet dreams.

Mon, 10/07/2013 - 09:11 | 4029911 Bobbyrib
Bobbyrib's picture

Not until they get paid:



That story is pretty funny.

Mon, 10/07/2013 - 09:18 | 4029928 SWRichmond
SWRichmond's picture

Does no one save for a rainy day anymore?

Mon, 10/07/2013 - 09:23 | 4029935 Bobbyrib
Bobbyrib's picture

Almost no one. Prudent people and the 1%, but that's about it.

Did you read the part about that government employee making $100K a year (in the comments someone looked her up because she was dumb enough to give her full name and her salary is public information) selling designer dresses she claims are worth $20K?

Mon, 10/07/2013 - 09:30 | 4029955 RKDS
RKDS's picture

Besides bankers and other executive takers, who has money to spare on savings?

Mon, 10/07/2013 - 09:30 | 4029956 RKDS
RKDS's picture

Besides bankers and other executive takers, who really has money to spare for savings?

Mon, 10/07/2013 - 10:02 | 4030031 PT
PT's picture

Dup post but worth upvoting twice.

When your competition is idiots with borrowed money, don't expect to buy anything at the auctions. 

Mon, 10/07/2013 - 10:31 | 4030130 insanelysane
insanelysane's picture

I really would like a reporter to ask one of these furloughed gov workers how their gov job benefits society.

Mon, 10/07/2013 - 09:03 | 4029882 Bobbyrib
Bobbyrib's picture

Fuck these retailers. How many of them use sweatshop labor to make their products? Looks like it was not a good long term plan afterall. As long as they outsource labor to Asia, I hope all of them go bankrupt.  It has more to do with these companies exporting jobs than it does about the Federal Reserve. As long as people can't afford your products, they won't buy them. That is an interesting concept, isn't it? They have some fucking nerve mentioning "stubbornly high unemployment."


Some foolish private equity company will probably buy them anyway..

Mon, 10/07/2013 - 09:48 | 4029993 NotApplicable
NotApplicable's picture

Retailers can't afford US labor, meanwhile US labor can't afford their products. Yet, in spite of this, you give the party that has stolen the purchasing power of both a pass. You need to learn a little bit more about how this stuff works before blaming the wrong party.


Mon, 10/07/2013 - 10:05 | 4030044 Bobbyrib
Bobbyrib's picture

I did not give the Democrats a pass. I was saying what DaddyO said was oversimplistic and childish. It's not all the Fed's fault, TPTB have a lot more tools than the Fed (two party system, multi-national corporations, MSM, etc.)

Mon, 10/07/2013 - 11:21 | 4030373 roadhazard
roadhazard's picture

You are wasting your time clarifying your post. You are now a terrorist on ZH.

Mon, 10/07/2013 - 12:42 | 4030727 11b40
11b40's picture

Which one is the "right" party?  Please answer with a good explanation, as I sure want to join up with that one.

Mon, 10/07/2013 - 14:33 | 4031240 scraping_by
scraping_by's picture

You're in it already.

There's the money party, and then there's the rest of us.

It's just a question of sticking with your own interest.

Mon, 10/07/2013 - 09:55 | 4030004 Eeyores Enigma
Eeyores Enigma's picture

Summary - People are slowing down their consuming due to having less household income. This coupled with ever increasing input cost means we as a major retailer need to cut costs buy laying people off, cutting wages, outsourcing labor to the cheapest third world location and substitute for cheaper inputs… until things get better.

Yeah that make perfect sense.


Mon, 10/07/2013 - 14:08 | 4031127 scraping_by
scraping_by's picture

Much of the savings has been from subsidies to export businesses in local currency. Compared to the dollar, the world reserve currency, local was play money and could be printed with abandon. Now that the US dollar's eroding, the advantage isn't nearly as great.

The power of subsidy has been known since the 1980's, when unions figured out the wholesale price of a Korean TV was less than the sum of costs of its components. They knew their members were up the creek.

Are foreign governments less willing to print up local to subsidize our consumers? Dunno, but it's probably part of the trend.

Mon, 10/07/2013 - 10:11 | 4030056 PT
PT's picture

It's all good.  Now certain zillionaires will learn that their wealth came from the middle class, they may have a little concern about losing that middle class.  And they might realize that they are not part of the "Too Big To Go Broke", and there is no room for them on the lifeboat that they themselves have helped the elite to board.

Aaah well, I can dream....


I don't think they heard me.  Maybe I shoulda used a bigger font. 

Mon, 10/07/2013 - 14:11 | 4031148 scraping_by
scraping_by's picture

Good luck. Corporate management self-identifies with the rentier elite. It must be something to do with the suits.

The Rotarian Rage of small retailers is also well-known. I hear a lot of it on these pages.

So, not only are the American workers lazy, overpaid, drugged up, and stupid, they haven't got the moral fiber to spend money in stores. Too busy buying vodka with food stamps. If they were decent, Christian patriots, they'd have larger incomes and sign contracts. Bad! Bad! Bad!

Mon, 10/07/2013 - 13:10 | 4030862 alangreedspank
alangreedspank's picture

You think Americans want these jobs ? How would they afford a Lincoln Aviator and a McMansion operating a forklift ?

Mon, 10/07/2013 - 14:16 | 4031172 scraping_by
scraping_by's picture

Which jobs are we talking about? The union jobs that pay a middle class wage and benefits, or the minimum wage part time jobs that require owning a car and buying uniforms?

And, yes, a lot of them are the same jobs.

Mon, 10/07/2013 - 09:04 | 4029885 Sudden Debt
Sudden Debt's picture

don't pitty the billionaire retailers... they don't give a fuck about you when they charge a 200% margin on their food products.

Mon, 10/07/2013 - 09:09 | 4029900 Bobbyrib
Bobbyrib's picture

DaddyO seems to believe that only if the Fed didn't exist, everything would be OK. Oh and I'm sure add the Democratic Party to the list.

So, basically a gold standard and the Republicans and everything is fine..

Mon, 10/07/2013 - 09:18 | 4029929 Bobbyrib
Bobbyrib's picture

Red arrow me all you want, the Tea Party has been compromised by the Neo-Conservatives like Boner. The government shutdown is all for show. The government employees are all being promised back pay for sitting home for a week. It's not that hard morons. The two party system is fucking you over. Mega corps are fucking you over.

Mon, 10/07/2013 - 09:35 | 4029966 DaddyO
DaddyO's picture

You've been here almost three years and you have the audacity to tell us all about the red/blue battle?

And the megacorps are the enemy?

Who woulda knew?



Mon, 10/07/2013 - 09:57 | 4030010 Bobbyrib
Bobbyrib's picture

Dear dumb dumb,

This what you wrote:

So when are retailers gonna put pressure on the Politicians and Banksters to change monetary policies and put people back to work?

Whant to iimprove retailers bottom line? End the FED?"


There is no "h" in want. When you write: "Whant to iimprove retailers bottom line? End the FED?" It leads people to believe you believe the problem is the Federal Reserve and not the outsourcing of labor/wealth to Asia. While the Fed certainly makes everything more expensive, the fact that there are not jobs, would make it very difficult for the average consumer to purchase goods. So even if the Fed didn't institute QE, the economy would be in the gutter for a few years, because of the corporate rule over our economy. Deflation would occur, but as long as the unemployment rate stayed "stubbornly high," Consumerism would still die it's slow death (possibly at a slower pace).

If you don't want your statement ripped apart, don't post overly simplistic solutions to problems, while misspelling basic words (want).


Mon, 10/07/2013 - 10:04 | 4030039 DaddyO
DaddyO's picture

OMG, the brutality of reading such mis-spellings!

I had no idea I was inflicting such horror on the readers at ZH.

Please forgive my mindless ravings and low brow approach.

So simplicity has no place in our overly complex financial system?

The very complexity that the FED has inflicted has led to our rosy economic outlook?

I'm sure you and the Krug can really set us on a path to financial stability, eh?


Mon, 10/07/2013 - 10:07 | 4030052 Bobbyrib
Bobbyrib's picture

Try reading what I wrote before responding:

"While the Fed certainly makes everything more expensive, the fact that there are not jobs, would make it very difficult for the average consumer to purchase goods. So even if the Fed didn't institute QE, the economy would be in the gutter for a few years, because of the corporate rule over our economy. Deflation would occur, but as long as the unemployment rate stayed "stubbornly high," Consumerism would still die it's slow death (possibly at a slower pace)."


Mon, 10/07/2013 - 11:17 | 4030353 Too Big 2
Too Big 2's picture

Dear Bobbyrib,
If you think either party has a better solution then you aren't paying attention. BOTH PARTIES, TOGETHER, HAVE FUCKED THIS COUNTRY IN THE ASS FOR 100+ YEARS. Don't get sucked into their talking points if you want to sound credible here on ZH.

Mon, 10/07/2013 - 13:07 | 4030845 DaddyO
DaddyO's picture

I did read what you wrote and take issue with the whole premise that QE saved us and that the evil retailers are to blame etc, etc., just more statist trash.

I am a simpleton in that I focus everything back down to the Constitution and the Bill of Rights.

The FED is unconstitutional, the IRS is unconstitutional and we can undo all of this through Nullification.

We didn't get in this mess overnight and we are not going to get out of it in a hurry.

More likely, the current system will collapse under its own weight, but I'm not going to lay dawn and take it because someone says its futile or what have you.

This fight begins at a grassroots level and I'm trying to start a small grass fire that grows into a full scale conflagration.

If you take issue with the simplicity of that approach, so be it but I'm not going to sit idley by and let those who call for the status quo or try to misplace blame or even try to trash the messenger.



Mon, 10/07/2013 - 10:25 | 4030095 ElvisDog
ElvisDog's picture

Helpful hint: Signing your login name to every post makes you look like a narcisstic noob. Your login name appears at the top of every post. We can all read it. You don't need to sign your name at the bottom.

Mon, 10/07/2013 - 13:26 | 4030940 cornflakesdisease
cornflakesdisease's picture

Hey idiot, you try typing on a smart phone on a bus going into work on Pencil-vania's roads.

Ps when you were born, they didn't know what to throw away; you or the after birth.


Mon, 10/07/2013 - 10:31 | 4030131 yogibear
yogibear's picture

That's right, billionaire relailers have no interest in the well being of the country, just themseleves. Buying cheap goods from Asia and reselling them here for a 200 to 500 percent markup, who cares about them. F them!

Mon, 10/07/2013 - 13:38 | 4031003 Oldwood
Oldwood's picture

And they support every single government program to insure food safety because it kills off their smaller competitors. All of this food safety yet half our produce comes from Mexico or south America.

Mon, 10/07/2013 - 08:46 | 4029821 Cognitive Dissonance
Cognitive Dissonance's picture



Mon, 10/07/2013 - 08:51 | 4029848 Pool Shark
Pool Shark's picture




Wrong end?


Mon, 10/07/2013 - 08:59 | 4029868 Cognitive Dissonance
Cognitive Dissonance's picture

Can there ever be a wrong end when it comes to sage advice from a horse?

Mon, 10/07/2013 - 09:15 | 4029918 Bobbyrib
Bobbyrib's picture

Yes, if it is John Kerry's mouth..

Mon, 10/07/2013 - 11:32 | 4030422 NeoLuddite
NeoLuddite's picture

Some prankster turned the saddle backwards and the rider was too drunk to figure it out.

Mon, 10/07/2013 - 08:41 | 4029823 Scarlett
Scarlett's picture


Mon, 10/07/2013 - 08:44 | 4029826 Headbanger
Headbanger's picture

I'm going to Dollar Tree right now!

Mon, 10/07/2013 - 08:50 | 4029837 GetZeeGold
GetZeeGold's picture



I hate that place....it takes like 30 minutes to checkout. It's got longer lines than the DMV!

The prices aren't that bad though.

Mon, 10/07/2013 - 09:04 | 4029884 moonstears
moonstears's picture

You go there for $3 worth of stuff and come out having spent $30. Like to see what neat chinese crap they have for a $1, though.

Mon, 10/07/2013 - 09:46 | 4029987 Dave Thomas
Dave Thomas's picture

I really like the chinese food products. Where else can you buy pepper that looks like shot peen media?


Mon, 10/07/2013 - 08:44 | 4029827 rguptatx
rguptatx's picture

so bullish? or bullshit?

Mon, 10/07/2013 - 08:46 | 4029832 RSloane
RSloane's picture

Yes! Its both.

Mon, 10/07/2013 - 08:47 | 4029835 asdfgt27v
asdfgt27v's picture

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Mon, 10/07/2013 - 08:53 | 4029855 Pool Shark
Pool Shark's picture



Je ne comprends pas...


Mon, 10/07/2013 - 12:14 | 4030624 Bananamerican
Bananamerican's picture

...and fuck off

Mon, 10/07/2013 - 08:54 | 4029856 GetZeeGold
GetZeeGold's picture



The universal language of business is english....learn it chithead.

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