Consumer spending has widely been credited with keeping the depth of the current recession relatively mild. This morning Best Buy, a major retailer of consumer electronics, announced that it is not going to meet Wall St. expectations for the current quarter — attributing the miss to new weakness in consumer spending.
In revising its outlook, the Company cited declines in consumer confidence resulting in flat comparable store sales in the past four weeks, which reflected general softening across most product categories.
“Our June results were in line with our expectations, but comparable store sales softened significantly in July, finishing the month essentially flat,” said Brad Anderson, vice chairman and CEO of Best Buy Co., Inc. “In light of the environment, we are closely monitoring sales and inventories, and identifying ways to pare expenses in the second half.”
Unfortunately, Best Buy isn’t alone. Other retailers reporting this morning include Neiman-Marcus (July same store sales down 2.7%), JC Penney (down 2.2%), and Talbots (down 19%). Even Wal-Mart, usually a bright spot, reported same store sales growth of 4.5% — below their expected range of 5 to 7 per cent.