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Wednesday
Sep242014

Who is The Grinch That Stole Christmas This Year?

Obama continually brags that the U.S. economy he created is robust while citing the confident American consumers leading the way to a vibrant, dynamic economy under his left-leaning Federal government policies and leadership. Instead, how about just praising good old fashioned American-style entrepreneurial private enterprise?

It's easy to take Obama at his word when Wells Fargo estimates an impressive $20 Billion dollars year-over-year growth in upcoming 2014 U.S. retail spending over the last 2013 holiday season. This boastful braggadocio certainly raises questionable doubts, however, as who and what comprises those figures; especially when its Obama pushing those numbers.

Based upon the recent excitement raised in September 2014 on the introduction with massive sales of over 10 million of the new generation iPhone 6, an enormous red herring surfaced. A telling clue was openly hidden which mislead the public to assume that they, the 'folks', were doing just fine as was a vibrant economy that could afford these pricey new iPhones as well as other consumer products too. That clue failed to report the realities about the retail consumer environment in the ongoing U.S. economy. In a Wall Street Journal commentary on iPhone sales, market analyst Miriam Gottfried stated, "Looked at in the short term retail spending in the U.S. is effectively a zero-sum game. And when one firm takes a bigger share of consumer wallets, others feel the pain." So, who feels the pain? That's a good question pointing to that hidden clue.

It turns out that U.S. consumers will spend $14 Billion dollars on iPhones, two-thirds of the projected $21 Billion year-end 2014 holiday growth. That leaves about one-third, $7 Billion dollars, to other U.S. retailers which also includes some anticipated carry-over year-to-year retail sales growth too. That is quite a drop in retail sales projections and a large lump of coal to shove into those retailers' Christmas stockings--Bah, humbug!

This 2014 Holiday season Apple is the 'retail grinch' who stole Christmas sales from all the other retailers. Simply put, the Apple successes have been a big flop for other U.S. retailers that sell mainstream commodities like clothing, accessories, household goods and home furnishings. For retail as a whole, the early forecasts for traffic and sales during the all-important year-end account for an estimated 40 percent of many retailers’ annual revenues. The 2013-14 percent sales increase [$21 Bil.] is +3.5%, an overall percent decrease; however if compared with less Apple iPhone sales [$14 Bil.] the increase [$7 Bil.] would only be +1.2% increase above 2013, the smallest increase since 2009 of +0.5%. [Obama's first full year in office] Refer to the 2003-13 National Retail Federation chart above, retail sales recorded by the world's largest retail association. 

Could the spring 2015 release of the new Apple watch portend more misery on first-quarter retail sales?--only time will tell and it's on Apple time!  

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