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Tuesday, February 15, 2011

As Heard in the Corporate Board Room: "Thankfully it is ONLY 314 days Until Christmas!"

Happy 314 days until Christmas!
I have a hard time determining who, the product making companies or the consumer, is more excited for Christmas 2011.
Headline inflation numbers are screaming in January and the tone of companies is changing fast—Hanes is raising the cost of undies up to 30%, Jones New York is planning to raise costs, and Kraft is planning to put the cost squeeze on the consumer by raising the cost of sqeezey cheese.  For the consumer, food is expensive, mortgage rates are screaming higher and gasoline prices are not abating.
I say one thing:  Bring on Christmas.

The battle will continue all year if prices stay high—consumers not buying and companies trying to find a way to make an extra nickel here and there… until Christmas. 
We have raped the consumer’s attitude over the last few years to understand one thing—Anything you buy will be cheaper at Christmas… ANYTHING. 
So raise the price of cheese and superman PJ’s corporate America.  Raise them 2% or 20% and pray to god that someone will buy them.  In the meantime, as sales fall and consumers tighten up, remember that Christmas is only 314 days away, and during that time the consumer will have been window shopping for months in bated anticipation of buying your products at liquidation prices.   
On another note, Home Depot is hiring 60,000 temp employees for 60 days (Two whole months!)… Lowes is cutting more employees back to part-time.  Smoke and Mirrors at the big box home retail stores. 
While the financial porn sites will spin this as ‘growth in XYZ sector,’ the truth about this story is that part-time employees are awesome for companies as they do not have to pay benefits.  Way to go Home Depot and Lowes—shining as bright as Wal-Mart or a Bangkok sweatshop in regards to employee appreciation.  I can see it now… “Hey Nick,” HD manager says to slimy part-timer.  “Stack those 14 pallets of compressed stone siding into attractive end-caps and then pick-up all the wood shavings in isle 7 by snorting the shavings up your nose.  After that, I need you to move about 5,000lbs of railroad ties to the garden center… Oh yea.  Nick, make sure you are off the clock by 11am—that is your 14 hours this week.”  Manager turns away but then turns back to Nick.  “Tomorrow is day 60 too Nick.  Last day buddy.  We will take the cost out of your orange apron out of your last check.”
Happy Window Shopping!
R and R Feb 15th

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