Commerce Department announces fifth straight month of rising retail numbers
A Best Buy store in San Francisco, Calif.
TEXT OF INTERVIEW
JEREMY HOBSON: Now to retail sales. The Commerce Department said today sales jumped almost a percent last month. That marks the fifth straight month of better sales at retailers.
Let's turn to Juli Niemann, analyst at Smith Moore and Company. She's with us live from St. Louis. Good morning, Juli.
JULI NIEMANN: Good morning Jeremy.
HOBSON: So, break down the numbers for us. Is this good news on the retail side?
NIEMANN: It is from the standpoint that this is the fifth month of rising retail sales. It says we're not heading back into a recession. And seventy percent of our economy is really based on consumption. The negative side though -- consumers are very cautious. We've have a 25 percent decline in credit card accounts. Everybody's using cash and debit cards. Consumers are still reducing debts, increasing savings. They're not looking for any gain in household income. So they want deals on everything or they won't buy. Now for retailers this means more traffic volume, but the focus is on bargains, which means lower profit margins.
HOBSON: Now Juli -- we also got earnings from Best Buy this morning -- a big well known retailer. They were disappointing. The company says demand is dropping. How come best buy can't get a piece of this good news in the retail industry?
NIEMANN: I think it's really specific to the company because their big focus is on video gaming, TVs, laptops. The problem here is that the prices are falling in TVs because of the recession, there's a huge glutton -- no body repairs any more. They replace it. And everybody is selling this kind of stuff, even 7-11. So there's huge competition out there. What is selling are the iPods, iPads, iWhatevers and that's not a big part of Best Buy.
HOBSON: And how many of those do you have right now Juli? Do you have all the iPods and iPads.
NIEMANN: I've got a Cricket that works really well.
HOBSON: Juli Niemann, analyst at Smith Moore and Company, thanks so much for your time.
NIEMANN: You bet.