- Tom Silva
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Signs of Optimism Amid Battered Consumer Confidence
Layoffs and the promise of more to come, falling home prices and shrinking investment portfolios have created the highest level of consumer pessimism on record, says the Conference Board. According to an online AP report, consumer confidence sank to just 38 in October, a significant drop from the rather rosy 61.4 reported in September. The Conference Board is a nonprofit business membership and research organization that is best known for its Consumer Confidence Index and the index of Leading Economic Indicators. Its membership includes top executives and industry leaders from the world’s most respected corporations. Consumer opinion is crucial because spending equals approximately 70 percent of all economic activity.
Despite the Conference Board’s report, good news does exist on the retail front. Discount big-box stores are the bright spots, and Costco was the big winner. The firm closed out its fiscal year on August 31, 2008, with sales up 13 percent compared with the previous year. During September, Wal-Mart Stores, Inc., reported a 2.4 percent rise in sales as cash-strapped shoppers purchased food and medicine from the retailer. Wal-Mart’s Sam’s Club warehouse division reported an increase of 4.6 percent. The more upscale Target Corporation reported that its net retail sales during the five-week period ending October 4 increased by 2.5 percent.