Monday, February 22, 2010

Online Sales Remain Strong... But For How Long?

During the incredibly important Christmas and December retail sales periods, the main bright spot was online sales (  According to CNN Money, retail sales rose in January, driven by strength in discount retailers and online merchants, according to a government report Friday.

The Commerce Department said total retail sales edged up 0.5% to $355.8 billion last month, compared with December's revised decline of 0.1%.  Economists surveyed by had anticipated that January sales would grow 0.3%.

The year-to-year increase was more impressive.  January retail sales jumped 4.7%, compared to the same month in 2009.

"This is decent news considering just how bad the labor market is," said Adam York, an economist at Wells Fargo.  "We had gains in most of the categories and the real strength was in general merchandise sales, so it looks like the consumers are just out there shopping again."

"We're looking for fairly modest gains in personal consumption and sales, but consumers are not going to come roaring back," he said. "With the weakness in the labor market, it's going to be difficult to see a sustained growth path in consumption."

However, similar numbers for the U.K, just reported, are bleak.

Data just released shows that, even the strong online sector is now faltering.  This data, while from the U.K., augers poorly for the American online sector.

Bad weather in January was a factor in the drop in post-Christmas monthly sales, which saw a decrease of 22%!  Bad weather is a typical excuse for bad sales!

Online shopping showed its slowest annual growth in nearly 10 years of the industry's index, with sales last month up just 5% on January 2009 (

Companies with only an online presence made 2% less money than 12 months before, according to the latest figures.  Those with a high street, direct mail or catalogue order busines as well saw sales rise by 10%. The traditional post-Christmas monthly sales drop from December to January was also far worse online than normal, with a 22% decrease.

According to the Financial Times, the annual growth rate of internet shopping has fallen to its lowest level since records began, according to a survey published over the weekend.

A recent survey showed that sales online rose by only 5% in January compared with the same month in 2009.  UK consumers spent £4.3billion with internet sites last month, as the rate of monthly growth declined by 22% compared with December's figure.

Given the stubbornly high level of unemployment domestically, it stands to reason that the surprising strong online sales figures from the U.S. will follow those in Great Britain.  While our economy has all the "appearances" of a recovery, there is no reason to believe, without a marked improvement in employment, that the bounce in retail and online sales will prove to be much more than temporary.

Care to weigh in?  TAKE ME ON!

Marko's Take

Our next segment of "Marko's Take TV" will be up shortly...
We will debuting the first four episodes on February 28th, at 9PM Pacific Time at Dimples, 3413 West Olive Ave, Burbank, CA 91505.  Hope to see you there!

Tomorrow, we'll re-visit Gold!

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