Retailer’s August report reveals their 12th month of sales declines as many company’s hopes for a recovery are dashed. According to an article in the Star-Telegram, retail stores saw an average sales decline of 3.4 percent for the month of August.
Stores suffering from declining sales include:
Target Corp. – minus 2.9 percent
Limited Brands Inc – minus 5.9 percent
Macy’s Inc. – minus a whooping 8.1 percent
The continued drop in retail sales is a bad sign that more job losses are on the horizon and that consumers are clamping down on their expenses in anticipation of job losses. Many retailers may not make it through this recession if those sales numbers don’t improve soon. Already, several retailers have filed bankruptcy and/or closed their doors since 2008 and it’s expected that many more will need to seek bankruptcy protection as creditors become nervous about outstanding loans.
Consumer spending accounts for up to 70 percent of our economy. When consumers suffer job losses and are unwilling or unable to spend it creates a cycle of corporate bankruptcy and job losses that can have long-lasting effects on the economy’s growth. These effects include permanent job losses, foreclosures and general contraction of the nation’s wealth.