Tags: Retail | Sluggish | shopping | economy

Moody's: Retail Sector to Remain Sluggish in 2012

Thursday, 27 Oct 2011 08:23 AM

The U.S. retail sector will remain sluggish through 2012 thanks to unemployment rates that won't come down, volatile stock markets and economic gloom in general, Moody's Investors Service predicts.

Higher prices of commodities like oil will make producing and shipping goods more expensive, which could further dampen retail activity.

"While consumers face headwinds, retailers remain challenged by increased commodity prices," says Margaret Taylor, a Moody’s vice president, the Wall Street Journal reports.
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"These constraints coupled with reluctant consumers means that holiday sales and earnings growth will be tepid compared to last year."

Drugstores, discounters, dollar stores and auto-parts retailers will perform the best in the sector, while supermarkets will feel pressure from low-cost, alternative food retailers, Moody's adds.

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(Getty Images photo)
Don't expect a robust holiday season this year either.

Accenture separately reports that that 88 percent of U.S. consumers plan to spend the same or less than last year during the upcoming holidays, the Journal adds.

Consumer spending accounts for 70 percent of U.S. output, and consumer confidence in the economy and country in general is often crucial to for economic health.

That's not the case today.

The Conference Board says its index of consumer attitudes, a closely followed economic indicator, fell in October to its lowest level since March 2009.

Unemployment and income insecurity concerns are keeping consumers on the sidelines.

Waning confidence in the economy has companies like Levi Strauss & Co., meanwhile, worried about the upcoming holiday shopping season.

"It is hard to imagine a very robust holiday season compared to last year," says Chief Financial Officer Blake Jorgensen, according to Bloomberg.

"We remain cautious around where the future is going over the next couple of quarters."

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The U.S. retail sector will remain sluggish through 2012 thanks to unemployment rates that won't come down, volatile stock markets and economic gloom in general, Moody's Investors Service predicts. Higher prices of commodities like oil will make producing and shipping...
Retail,Sluggish,shopping,economy
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2011-23-27
Thursday, 27 Oct 2011 08:23 AM
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