Boston, MA 10/17/2013 (wallstreetpr) – This September, just before a few weeks of the holiday season, shoppers in the U.S. shy away from indulging in shopping spree. People are on a lookout for more discounts and better bargains. This is because of the present political scenario in Washington. On the other hand, retailers are disappointed with the weak sales and low job growth.
Major selling brands such as the L Brands Inc., Gap Inc., Rite Aid Corporation (NYSE:RAD) have reported weaker than projected sales. Last week, the sales at L Brands were reportedly 1% less than that estimated by Wall Street. The company announced that profits by sales at the stores which were open at least a year climbed up by only 1%. To combat, the company had to push itself to offer additional discounts at its Victoria’s Secret chain. Reports of decline in sales were heard from others including American Apparel Inc., Zumeiz Inc. and The Buckle Inc. Surprisingly, these are stores which are meant more for the youth. Despite this fact, the three reported decline in same-store sales.
As compared to the profit of 5.5% in the previous year, expectations were lowered for a group of as many as nine retailers to a mere 3.1% this year. A general trend was observed that people spent only at stores where they were offered huge discounts.
A couple of weeks ago, Rite Aid Corp had reported their comparable sales of general goods declined by 0.5%- this in contrast to the rise of 2.9% at Walgreen Co. Both these companies generate their revenues majorly from drug prescriptions. The business leaders of the country are worried about the affect of the political deadlock which began in Washington on Oct 1, especially when the holiday season is only almost a month ahead. They fear that if this debt ceiling is not raised by the promised deadline of Oct 17, U.S. could default on debt.
