Deep discounts had shoppers in Texas and around the country packing stores over the weekend, but retailers are still saying it's not looking like a strong holiday season. Some parts of the U.S. also have extreme winter weather conditions this holiday week. The International Council of Shopping Centers says it expects final numbers will be the worst in nearly 40 years. From flagship department stores to Main Street shops, consumers are finding extended hours--in some places, around-the-clock shopping. Retailers are trying to salvage what they can from one of the worst shopping seasons in decades, brought on by the recession and growing economic uncertainty. Ahmad Parpia manages Marquise Jewelers at Valley View Mall in Dallas. He's seen his most profitable period of the year—fizzle. Few shoppers are stopping at the jeweler's four stores to buy diamond-encrusted chains, gold watches and other pricey items. He says business is almost 80 per cent down over the last two years. The International Council of Shopping Centers expects established stores to post their worst performance for the holidays since at least 1969, when it began tracking such data.
Spending figures from Reston-based ComScore indicate that $859 million was spent online on December 15th, making it the second heaviest spending day this season. Consumers spent $887 million online on December 9th. ComScore's tracking of online spending through December 19th shows $24 billion has been spent at Web sites this season—down one per cent compared to corresponding days last year. Average online spending each day since Thanksgiving has been at $643 million—five per cent higher than last year. But this year's shopping season between the two holidays is actually 16 per cent shorter than last year.
Retailers are doing whatever they can to meet the demands of consumers. Some are volunteering on-the-spot discounts. Others are letting customers haggle-down a price to well below the one that's marked. The manager of a jeweler in San Francisco says she and her staff are bargaining more than ever before. But she says it's not working wonders — since customers still have their budgets. Instead of a break on prices, some retailers are giving customers more wiggle room for returns. Even Circuit City, which has filed for bankruptcy protection, has extended its holiday return deadline to the end of January.
Annual interest rates on credit cards fell last week, according to Bankrate.com. The average APR fell to 11.42 per cent on low-interest cards from 11.45 per cent the previous week. Cash back cards fell from an average APR of 13.66 per cent to 13.57 per cent last week. Balance transfer cards dropped to 13.07 per cent from 13.16 per cent the week before.
The global economic downturn and a surging yen have hit Toyota in the bank account with the automaker projecting its first operating loss ever for the fiscal year through March. Toyota's president says "the change that has hit the world economy is of a critical scale that comes once in a hundred years." He says the drop in vehicle sales over the last month was "far faster, wider and deeper than expected." Toyota is forecasting an operating loss of $1.66 billion through March, 2009--the first such loss since Toyota began reporting such numbers in 1941. Operating income reflects a company's core business performance and does not reflect income taxes and certain other expenses included in net profit. Last fiscal year, Toyota had a significant operating profit. Toyota slashed its earnings forecast and now expects it will barely break even for the year through March with a net profit of just $555 million.
A federal bankruptcy judge has given Circuit City final approval for $1.1 billion in financing to operate while it is in Chapter 11 bankruptcy protection. An attorney for the nation's second-biggest electronics retailer also said at a hearing in Richmond that Circuit City's sales have been down between 40 per cent and 50 per cent since the company filed for bankruptcy protection last month. Richmond, Virginia-based Circuit City had faced pressure from vendors and consumers who aren't spending. The debtor-in-possession loans approved by U.S. bankruptcy judge Kevin Huennekens will be used to stock merchandise and pay employees. They replace a $1.3 billion asset-backed loan the company had been using. The judge also gave the company approval to void several service agreements and severance contracts with former employees.
The nation's largest banks are refusing to say how they're spending billions of dollars in taxpayer money. The Treasury Department has been dolling out cash to banks as part of the unprecedented financial bailout. But there's no system in place for monitoring what the banks are doing with the money. The Associated Press contacted 21 banks that have received at least $1 billion in taxpayer money and asked four questions: how much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers. Congress rushed the bailout into law so quickly, no public disclosure was required. Now, lawmakers say, they're going to try to go back and get some answers retroactively.
The interest rate on two-year Treasury notes has fallen to the lowest level on record. The Treasury Department says it auctioned $38 billion of two-year notes at a yield of 0.922 per cent--an all-time low. The rate was down from 1.269 per cent at the last auction of two-year notes on November 24th. Treasury rates have fallen to historic lows as the worst financial crisis in 70 years has triggered a rush by investors to the safety of Treasury securities.
The IRS says its collections from audits and other reviews fell this year for the first time in a decade as the agency focused more of its limited resources on ensuring that people got their economic stimulus checks. Overall, collections dropped about 4.7 per cent--to $56.4 billion for the fiscal year that just ended. The drop occurred after what had been a record-setting year in 2007, which agency officials describe as an anomaly. In addition to its regular duties, the agency issued 117 million payments worth more than $95 billion as part of the federal economic stimulus program this spring, and it did so with about two per cent fewer officers and agents conducting audits and other reviews.
In his first video safety message, Chemical and Safety Board Chairman John Bresland says that chemical companies and refineries need to continue investments into safety, even with the economic downturn.
"As refining margins fall, the pressure will always be there to trim operating expenses — perhaps by delaying a needed repair project or cutting operator positions. My safety message for oil and chemical companies is clear: even during economic downturns, spending for needed process safety measures must be maintained. Downturns and recessions can actually be a good time to take care of deferred maintenance."
Bresland noted that the CSB investigation of the 2005 BPTexas City refinery blast linked the accident to corporate spending decisions in the 1990s, when low oil prices triggered cutbacks in maintenance, training and operator positions.
A brief fire at a Corpus Christi refinery's sulfur unit resulted in the temporary closure of a portion of Interstate 37 so Citgo officials could take air samples. No injuries were reported. Company spokesman Larry Elizondo tells the Corpus Christi Caller-Times that there was no off-site impact found from the fire, which lasted about ten minutes and was contained. The interstate was closed for about 45 minutes Sunday. Elizondo says it's not yet known why the fire erupted at Citgo Refining and Chemicals. He says the fire was at the West plant's sulfur unit, which removes sulfur from crude oil.
Houston-based Waterborne Energy says global liquified natural gas production will significantly increase next year. Waterborne Energy expects a 30 per cent rise in total LNG production in 2009. The latest edition of Waterborne's LNG report says Asia and Europe may not be in a position to absorb this new production. And the report says the economic downtown will limit power demand in Europe, Asia and the United States. Excess global LNG will begin to move toward U.S. import facilities simply because it has no place to go.
The Floating Liquified Natural Gas business will be worth $8.5 billion by 2015, according to a study published by energy business analysts Douglas-Westwood. The reports says escalating construction costs and high local opposition to onshore LNG facilities and geopolitical issues are key drivers.
Disc Makers has opened a store in Houston's Museum District, according to the Houston Business Journal. This is the 11th store for the independent CD and DVD manufacturer, and its first outlet in Texas.
In a year of taxpayer bailouts for troubled companies, an ExecuNet survey reveals C-level executives and vice presidents are expecting small bonus checks this year. This year's bonuses are expected to be ten per cent smaller than in 2007. Bonus checks can account for around 19 per cent of total annual compensation. Corporate performance is cited as the most important variable in determining year-end bonuses.
Heavy-equipment maker Caterpillar says it will cut executive compensation by up to 50 per cent next year because of weakening demand triggered by the global economic downturn. The world's largest maker of mining and construction equipment also says it will reduce compensation for senior managers by five per cent to 35 per cent in 2009. Other management and support staff will see a reduction of up to 15 per cent. The Peoria, Illinois-based company says the cuts reflect planned reductions in its incentive program and equity-based compensation. Caterpillar is also offering incentives to U.S. management and support employees to voluntarily leave the company. Eligible employees have until January 12th, 2009, to join the program. Caterpillar last week announced it's moving one of its primary global assembly, test and paint facilities to Texas. Governor Rick Perry says the move will create more then 1,400 jobs. Texas is investing $10 million through the Texas Enterprise Fun as a deal-closer. The facility will be built in Seguin. Texas was in competition with South Carolina and Mexico for the plant.