U.S. retail reports and earnings reports from JCPenney and Wal-Mart give me the impression that people are tired of buying stuff.
U.S. retail sales were up 0.1 percent in April. That’s a rate lower than population growth, but it is compared to a March in which consumers partly made up for purchases they couldn’t make when extreme winter weather kept them home in January and February. Wal-Mart blamed winter weather for a small part of its slowdown: retail traffic at Walmart stores was down about 2 percent from the year before, resulting in sales revenue that was essentially flat. At JCPenney the news was worse. Sales rebounded by 6 percent but after an exceptionally dismal 2013 that is not nearly enough to put the company back on sound footing or even to point it toward a possible strategy. The poor results from JCPenney suggest that shoppers are being more picky and won’t buy stuff just because it’s there and on sale. At Wal-Mart it seems shoppers who are financially squeezed are opting to postpone purchases that aren’t urgent so that they can buy better things than they are seeing in the store. This doesn’t bode well for Wal-Mart’s ability to sell clothing, as current clothing can take a long time to wear out. Wal-Mart’s results are particularly telling at a time when many of its shoppers are staying away from one of its biggest competitors, Target. Wal-Mart is declining in spite of a boost from Target’s misfortune, so you can expect Wal-Mart’s results to look even worse as the Target story fades.
None of this means people will stop shopping, but the merchandise that stores offer will have to do more to inspire shoppers. If people go shopping and see the same old things, not made or presented particularly well, they’re more often willing to wait until they see something better.