Schizoid retailers

The Wall Street Journal is reporting that November retail sales have nearly doubled the Department of Commerce’s expectations, clocking in at 1.3 percent growth. As we have been told since Thanksgiving, retail sales have been a mixed bag, with discounters and online retailers doing pretty well and mainline stores doing less well.

The Commerce Department’s qualified good news was released this morning, after the WSJ’s press time. An article from Section B (“Stores’ Dilemma: Set Discounts or Hold the Line”) of today’s paper has a slightly less favorable impression of consumer spending, relying upon data that show many consumers are delaying or deferring purchasing in hopes of getting steeper discounts. One industry observer was quoted as saying that “it looks like the middle of August out there.”

Black Friday may have featured a decent showing by retailers – and the November data tend to back that up – but I wouldn’t guess that December is going too well. We’ll see an increase year-on-year because December 2008 was terrible, but I’m expecting holiday-season retail data to confirm one of my main points regarding the New Normal – structurally lower consumer demand.