The holiday season has finally come and people are on shopping sprees. However, this may not be the ideal time for retailers this year. Paradoxical as it might seem, it is nevertheless true.
People literally shop till they drop at malls throughout the United States. It is the holiday season and Christmas along with Santa Claus will be coming soon. But it is the retail agents that find themselves stuck between a rock and a hard place. Retailers are beginning to issue warning signals regarding the sales that are likely to take place this winter. Things don’t look good from the signs of the times that are there.
Best Buy was the first one to announce the dismal prophecy in this matter. The cutthroat competition among retailers will upset the apple cart so to say. Best Buy is down by 8.7% currently. GameStop has reached an all-time low of 11%. Furthermore, sales in the case of private retailers are stuck at a measly 1%.
Libby Bierman, an analyst at research firm Sageworks, said, “Due to the combination of slowing sales growth and declining consumer confidence. It doesn’t look like the holiday season is going to be the solution U.S. retailers need.”
The twin factors of retarded sales figures and eroded consumer confidence have virtually eaten their way into the market situation. Holiday shopping won’t give retailers the much-needed boost their products deserve so badly. Wal-Mart too has a low profit outlook for the future. Demand is pretty low and so retailers will have to resort to the hateful choice of cutting prices.
Black Friday is far off and yet the prices of goods have fallen by a whopping 20%. Andrew Zatlin at SouthBay Research wrote, “It’s not that consumers are re-thinking a tablet purchase, it’s that suppliers misjudged the total available market. Silicon demand is falling fast and excess capacity is bad news for 2014 factory orders.” Many blunders and misjudgments lie behind this phenomenon. The market is in a precarious position and retailers will have to be very careful.