Dear Santa Letters Ask For Clothes, Shoes, Not Toys

Looking for the reason behind soaring apparel sales and weak sales at Best Buy? You can find an explanation in Sad Santa Letters that the United States Post Office opens a reads as part of "Operation Santa".

With just nine days to go until Santa shimmies down those chimneys, letters to the big, jolly guy are coming in fast and furious. "The common theme this year seems to be a single mom with young kids, the parent has left -- they don't know who the father is, or the father left -- and they can't pay the bills," said Pete Fontana, head of the United States Postal Service Operation Santa in New York.

"We had one little girl write in and say all she wants is a winter coat for her mom. Nothing for herself," he said. "We had another letter for grandparents and they wanted to put a turkey with the trimmings for the holiday dinner ... but they couldn't even get their medicine."

Other letters are similarly heartbreaking.

Eight-year-old Skayla told Santa that her mother doesn't have a job and her father lives in the Dominican Republic, leaving it up to her grandmother to buy everything. She asked for clothes and shoes for herself, her 7-year-old sister and their infant brother, even including their sizes.

"Thanks Santa," she wrote," I LOVE YOU."

How You Can Help

If you want to help make a Christmas wish come true, the best way is to Contact a local post office participating in Operation Santa.

Industrywide Demand for Electronics is Soft

Please consider Best Buy cuts outlook as results disappoint.

Dec. 14, 2010, 12:55 p.m. EST

The No. 1 U.S. electronics retailer’s profit fell as lower demand for televisions, notebook computers and videogames led to a sales shortfall in the U.S. While margin widened slightly, analysts said they were concerned that it came at the expense of sales.

Best Buy Co. shares tumbled more than 15% Tuesday, their biggest decline in more than eight years, after the retailer reported an unexpected decline in fiscal third-quarter profit and cut its outlook.

“There’s interest there from consumers on the latest and greatest, but really they are making trade-offs in their discretionary spending, not only across CE [consumer electronics], but within CE categories, where there are periods of time we may have historically seen them buy multiple large products in a year, they are being more choosey at this point in time,” said Muehlbauer [Best Buy's CFO] on a conference call with analysts.

Ample Warning

There was ample warning for that huge miss at Best Buy. On December 3, a report from SpendingPulse showed Retail Sales Led by Apparel, Consumer Electronics and Appliances Down.

Retail sales are way up year-over-year and apparel is leading the way. I have this email from SpendingPulse to share: ....

Year-over-year Total Apparel sales in November saw another sharp monthly increase. At 9.6% this was the largest year-over-year growth in 2010 for that sector following the previous record in October. Total apparel has enjoyed 8 out of 11 months of year-over-year gains so far in 2010. In November, all of the sub-sectors posted year-over-year growth.

For the second consecutive month, the Consumer Electronics and Appliances segment posted a year-over-year decline, although at -1.1%, it was not as severe as October’s decline. The Consumer Electronics sub-category was down by 1% while the Appliance sub-sector fell by 1.6% year-over-year.

Pent Up Demand For Clothes

The SpendingPulse report shows a pent-up demand, not for junk, electronics, or appliances, but for specifically clothes.

Repeating my ending comment from the above article: It's nice to see shoppers focus on real needs instead of electronic garbage. However, pent-up demand for apparel cannot last forever, nor can apparel sales form the foundation for a lasting recovery.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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