The holiday shopping season got off to a surprisingly solid start, according to data released Saturday by a research firm. But the sales boost during the post-Thanksgiving shopathon came at the expense of profits as the nation's retailers had to slash prices to attract the crowds in a season that is expected to be the weakest in decades.
Sales were 3% higher than last year's Black Friday - in nominal terms. Shadow Government Statistics calculates that CPI inflation was at an annualized rate of 11.6% as of this October. Even if we assume that this month's massive Fed lending hasn't immediately made that number worse (of course it has!), that sales figure translates into an 8.6% decline in real dollars.
Friday's shopping action isn't even close to putting retailers in the black. Even the article hints that retailers had to sell at undesirable prices just to move inventory backlogs. The retail picture will get a lot worse as job losses accelerate between now and Jan. 2009.
