Retail: Rate Decreases Won't Carry Over to Spending

Implications: Rate decreases don't necessarily mean more consumer spending.  Specific companies need to find ways to be profitable within the existing market.

Analysis: Two great subjects:  Retail and Rates.  Do they have a relationship, are they dating?  Are these two industries in the same car on a Friday night out on Whistler's Point exploring the world together, or are they just passing by one another on the way to the lunch room?

Sure interest rate changes can have an effect on Consumer Spending, but the reality is much less defined.  A large number of consumers have already spent their disposable income, many have spent their disposable income for the next several years.  Consumers are broke!

Instead of looking for a generalized way of determining Consumer Spending for the upcoming Holiday season, start looking at the details that matter.  Has a company found a way to tap into the decreasing number of consumers that haven't tapped themselves out?  Has a company found a way to increase profits even if they do not have increases in same-store-sales?  These are indicators that matter when competing within the current sales market.

Companies that will have increases this Holiday Season are the companies that have found a way to increase their share of the People-who-still-have-money category.  Not the companies that are relying on existing customers to refinance their homes.