Retail Picture Both Good and Bad

Overall retail sales for the nation in September fell further than what economists had predicted, reported the Department of Commerce. The drop was 2.4 percent, the largest since 1992 when the government began tracking retail sales figures. By comparison, retail sales for specialty and chain stores in the outdoor and ski industries reports more encouraging preliminary numbers, according to Leisure Trends, which tracks those sales.
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Overall retail sales for the nation in September fell further than what
economists had predicted, reported the Department of Commerce. The drop
was 2.4 percent, the largest since 1992 when the government began
tracking retail sales figures. By comparison, retail sales for
specialty and chain stores in the outdoor and ski industries reports
more encouraging preliminary numbers, according to Leisure Trends,
which tracks those sales.

Sales for outdoor retailers are up 3.3 percent to date, with 447 stores
reporting -- lower than the widely published numbers of 7.4 percent
reported last week. Sales in the south posted the highest gains.

Ski and snowboard shops -- with 376 storefronts reporting -- show sales
up 6.1 percent, well down from the 19 percent reported a week earlier.
Retail sales were strongest in the east and south, weakest in
California.

Jim Spring, president of Leisure Trends (www.leisuretrends.com),
cautions that this data is not complete and represents only a subset of
the more than 1,100 stores that report to them each month.

"In talking with store owners and managers, the observations are that
sales are coming back better and more quickly than anticipated," Spring
said.

That feeling is matched by the results in another study, the
mid-October "Consumer Sentiment" report conducted by the University of
Michigan. That report shows the consumer-sentiment index has risen, up
to 83.4 percent from 81.8 percent in September. That demonstrates more
consumer optimism about the future, the university said.

Still, the underlying feeling is that no one knows for sure what the
consumer will do. Also, another significant terrorist event could
seriously shake consumer confidence. There is evidence retailers
nationwide are already toying with offering deep discounts as the
holiday season approaches -- even well before the typical time -- in an
aggressive effort to woo shoppers. While this might not be great for
profits, it is likely to boost retail sales, at least statistically.

SNEWS® View: This
is an especially difficult time for both retailers and manufacturers.
On the one hand, manufacturers have warehouses and shipping pipelines
filled or filling with pre-season orders. On the other hand, we are
aware of more than just a few major specialty retailers who've
contacted manufacturers to either slash pre-seasons or drop them from
the books completely -- causing at least one manufacturer to hold
emergency sales meetings to decide how to proceed. It is a tough road,
because no one wants to get stuck with excess inventory, least of all a
retailer.

If a manufacturer gets stuck, however, the alternative for them is to
simply shed the inventory at deep discounts and that will not be good
for business, profits, or long-term industry stability. It is our
belief that retail sales for the outdoor and fitness communities will
remain healthy, even if the rest of the economy appears to be
struggling -- and initial numbers presented by Leisure Trends support
this contention. Yes, you must take care of business to remain
profitable, but try to do so with an eye toward ensuring someone else
does not get burned and toward the continued health of the industry. We
believe that sales for camping and close-to-home adventures and
activities are going to increase dramatically in the months to come as
consumers look for ways to get a grip on their lives and connect with
family and values. That is good business for everyone.

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