Retail sales see biggest decline in two years

Source: MSNBC

WASHINGTON - Government data show retail sales fell off a cliff in September, plunging by the largest amount in two years. Worried consumers shunned the malls and auto showrooms in the midst of the country’s financial meltdown.

The Commerce Department reported retail sales decreased 1.2 percent last month, nearly double the 0.7 percent drop that had been expected. The surprise showing significantly increased the risks of a recession. Consumer spending is two-thirds of total economic activity.

The weakness was led by a 3.8 percent drop in auto sales. Sales dropped below 1 million units as consumers struggled to find financing.

Read more: http://www.msnbc.msn.com/id/27194806/

We have 5 or 6 restaurants in town. But only one is the "heart of the town". I pass it every day on the way home and I honestly thought that maybe the owners were on vacation or something. My sister went there last night to pick up dinner and told me that they are open, but have never seen business conditions like this. Layoffs are likely.

Our little town is home for a lot of "snow birds" which should be clogging our roads and restaurants, but I don't see them this year.

not many McCain/Palin bumper stickers here either.

Cleveland is like a ghost town.

That is sad. I left in '92, and it was on a come back. I do plan on coming for a visit next spring (cannot wait to have a Romanburger). Do you think the observation deck of the Terminal Tower will be open by then?

...and yesterday I went to a local Chinese restaurant. The place has a good reputation, family owned...the husband and wife had a couple of restaurants in Hawaii for 25 years before relocating to Silicon Valley to be with their kids, who were attending college.

ANYWAY...one of the sons was waiting tables. I was the only customer in the place. I asked him if the family had every considered a Web Site. I told him that the owner of another restaurant shares stories on a regular basis about new customers coming in as the direct result of the site I built for him.

His response? "We don't need one. We're happy with word of mouth."

It was 11:30 on a Tuesday and I was the only customer in the place, but they're happy.

Another client referred me to the owner of a pizza parlor who is two doors down from their store. He paid $300 for one of those "build it in 5 minutes" Web Sites and has gotten no traction at all from it. My client showed him the work I did for them. He saw the difference and said it looked great and then said "I think I'm going to wait and see what happens with my site before I change it." My client told me that he regularly walks into their store and asks "I wonder why business is so slow?"

I belong to a local networking group. The group communicates through "Yahoo Groups" email. This week, three different business owners packed it in and closed their businesses, sending "goodbye and thanks for everything" emails.

The headlines about the bad economy and lack of credit are relentless, and there is a segment of the population that believes every word they read or hear. They become afraid to spend money, whether it's for personal needs, personal pleasure, or to promote their business. They decide that the best way to get to the other side of what the economy is going through right now is to poull their heads into their shell like a turtle and remain perfectly still.

That strategy is going to work for some people. The rest will be sending out emails about how they tried to keep their business afloat but decided to give up instead.

I don't mean to make things sound one-dimensional or simplistic. It's just the fact that we are in a battle right now and the thinning of the herd is a natural by-product. I have clients who refuse to be "thinned" and I have other clients who have already given up.

:patriot:

OTOH Dollar Stores will be booming as the main choice for holiday gift shopping.

I absolutely HATE Walmart and have boycotted them for many years. Well, this year I've gone a couple of times for food staples, as the prices are lower. DA&&!

if a 3.8 percent drop in auto sales is a huge crisis. It would seem to me that there should be some kind of variation from month to month that could be at least 3 or 4 percent. Also, I believe I saw (within the last couple of days) that retail sales had "plunged" 1.7%. Again, that's a tiny percentage, and I fail to see why that should indicate an enormous economic crisis. Or at least not in and of itself.

Heck, speaking for myself, some months I spend more money than others. And my personal spending variation is a lot more than 3 or 4 percent.