Retailers back up shipping lines’ predictions as orders are cut

Backing the
shipping line
executives who told
FTW that the usual
pre-Christmas
peak import
season had just
not transpired this
year are retailers
– with press reports
indicating that they have
cut orders in expectation of
not so merry Christmas sales.
The comments are mostly
aimed at what are termed
discretionary goods – those
that are not necessities – and
goods at the luxury end of the
spectrum.
The big fear, according
to Business Report
commentators, was the
possibility of overstocking –
when bleak Christmas sales
might force retailers into
“debilitating discounts” to try
to escape stock overhangs in
the New Year, which would
negatively impact on gross
margins.
Many highincome
earners may
fail to earn
performance
bonuses this
year and their
shareholdings
are likely to
have plunged –
particularly as this
global financial crisis is
not easing. This could see
spending on luxury items
falling dramatically.
Middle-income earners are
still expected to get their 13th
cheques – but cutting debt
may supersede the traditional
big-ticket gifts this December.
High inflation and interest
rates are also likely to have an
on-going debilitating effect.
Forecasting this bleak
Christmas is the retail
industry already facing
a growing sales decline.
According to Statistics SA,
last December’s sales fell
0.5% and the decline has
deepened – with August sales
already 5.5% down.