Market Insider

Even cheap gasoline isn't enough to fuel consumer spending. In a recent consumer survey, 76 percent said they were not willing to spend more for non-essential goods and services even with a more than dollar per gallon decline in the price of gasoline in the last month.

Since mid-September, as news of the financial crises worsened, the U.S. consumer has been on a spending strike.

The survey, conducted late last week for the International Council of Shopping Centers and Goldman Sachs, shows that dropping gasoline prices spurred spending only modestly. Twenty-three percent of consumers did say they would spend more on things like consumer electronics, restaurants, apparel and jewelry. Yet, only 9 percent of the 1,000 questioned said they would spend considerably more.

Store sales data backs this up. For the first time in five years, the ICSC-Goldman Sachs weekly chain store sales snap shot shows that weekly chain store sales fell on a year-over-year basis. Sales, for the week ending Nov. 15, declined 0.1 percent compared to last year, and a slight 0.3 percent gain compared to the week earlier.

And of course, most retailers reporting earnings this week have shown that things are not good as the holiday season gets underway and are not likely to get better in the near future. Saks today posted a worse than expected loss even as it slashes prices to attract shoppers to its upscale stores. The company's CEO described consumers as being in "frozen mode," and Saks says it is not adverse to closing stores.

Wal-Mart

WMT loading...

Quote  |  Chart  |  News  |  Profile

[WMT  Loading...      ()   ] US CEO Eduardo Castro-Wright, speaking at a Morgan Stanley conference, said that chain's traffic has actually been helped by falling gasoline prices. He said as gas prices rose this year, shoppers cut back on trips to rural stores, but as prices fell in October traffic increased to rural and urban stores. But Wal-Mart is one of the bright spots in the retail sector.

"One would think that you would get some lift from gasoline prices, but we argue that it's really offset by the contraction in employment," said Michael Niemira, ICSC chief economist.

"We're still in a pretty deep hole, and it will take a while to come out of it," he said. "The issue is whether this is the low or whether there is more downside."

For November, Niemira expects chain store sales to fall by 1 percent, but he said the comparisons for December get better. That, in part, is because Thanksgiving is so late in November this year. For December, he says comparisons could improve to a 1.5 to 2 percent increase.

One factor that is helping the picture is the strength of Wal-Mart. Wal-Mart in October saw same store sales rise 2.4 percent, better than the 1.6 percent increase expected. But many store chains saw double digit declines.

"We're still locked in that kind of pattern definitely for November. The Arithmetic is awful for November. A lot of the apparel and department stores will see big declines, anything from 5 percent to double digits," he said. "November is likely to be down 1 percent but it's worse beneath the surface. The only number it's not worse in the aggregate number is Wal-Mart," he said.

• UPS Cranks Up Its Sleigh for Dec. 18

Questions?  Comments? 

Tools:

PrintEmail

Next Post

Previous PostBack to Main Page

• 

CNBC HIGHLIGHTS

» More: Blogs | Slideshows | Special Reports | Top Video

• 

• Buffett & Gates Talk At Columbia 

• Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.

• 

• The Roberts Way 

• For the chief of cable company Comcast, growth has been about making deals – generally very large deals.

• GE Talks Go Slowly 

• 

• Carbon Insurance 

• Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?

• 

• Acai In The Big Box 

• The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.

• 

• Swiss Sue Google 

• Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.

• 

• Bugatti in the Drink 

• A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.

COMMENTS

More Comments

 

« First | « Previous

Next » | Last »

Thank you for joining our discussion. Your comment has been posted.

ADD COMMENTS

Please Sign In or Register to participate.

In order to add a comment you must click here and accept our terms and conditions.

Edit Screen Name

Please sign-in/optin or register to be able to submit comments.

Remaining characters

CNBC welcomes your contribution. Please respect our community and the integrity of its participants. CNBC reserves the right to moderate and approve your comment.

PREVIEW COMMENT

Your comments have not been posted yet.
Please review your submission to make sure you are comfortable with your entry.

Your Comments: