Detroit Free Press: More stores struggle as recession has people buying only necessities

[marmar]

More stores struggle as recession has people buying only necessities
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • January 9, 2009


With most retailers reporting dismal December sales Thursday, analysts expect a swelling number of store closings that will leave many malls with gaping holes.

Already, area malls are trying to fill spaces left by retailers such as Steve & Barry's, Linens 'N Things, Mervyn's, KB Toys, Value City, Starbucks, Moonstruck Chocolate and others. This week, Macy's said it would close 11 stores, but none in Michigan.

The recession is expected to cut deeper than any before it as consumers stick to necessities and deeply discounted apparel and accessories.

The International Council of Shopping Centers predicts that 148,000 stores closed in 2008 and another 73,000 stores will close in the first half of 2009. It would mark the largest number of store closings since 2001 when 151,000 stores closed.

Discounter Wal-Mart Stores Inc. reported Thursday its sales at stores open at least a year rose 1.7%, lower than the expected 2.8% gain for December. .......(more)

The complete piece is at: http://www.freep.com/article/20090109/BUSINESS06/901090357/1019/BUSINESS/More+stores+struggle+as+recession+has+people+buying+only+necessities

[DJ13]

1. Part of the problem is that necessities have gone up too much

The consumers are getting screwed at the grocery store, and screwed at the drug store.

Even as the MSM keeps parroting the deflation meme, every day more and more necessities are going higher, so of course theres less being spent on discretionary purchases.

Thats why they are called discretionary.

[blue_onyx]

2. The article says at the end....

that sales are expected "to remain weak in 2009, with a 2% growth rate for the year." I think 2% growth is pretty optimistic.

As far as the local malls mentioned, it's interesting that Laurel Park Place is considered a "destination" mall. I rarely go there. Livonia Mall has been dead for years. I think there are plans to redevelop it soon...probably by adding a Walmart.

I'm sure we'll see stores declaring bankruptcy or closing within the next couple of months. Hopefully not too many chains close although but I'm not too optimistic.