Santa Baby, One Thing We Really Need ... Some Christmas Commercialism
2. Small Business Armageddon on the Horizon
Forty-one percent of small businesses were delinquent on their November rent. That’s almost half for the perpetually confused Keynesian economists out there. The numbers are worse in some key segments with 42% of restaurants, 45% of gyms, and a full 57% of beauty parlors behind on rent. A good many of these survived on COVID loans while producing nothing as the government shut them down contributing to the inflation, which is now driving business away.
Additionally, 41% (yes, the same number) report that they are now making less than half of what they did pre-COVID shutdown. Many of these will sadly create the second wave of failures from the government’s insane reaction to COVID and then, coupled with the higher rates required to battle inflation, commercial real estate will tank, and with it, bankruptcies.
3. The Purchasing Manager’s Index for Both Manufacturing and Services Is in Severe Decline
This trend started months ago and was largely ignored. These two charts show the severity and one of the reasons why Amazon fired logistics workers this past week. What is disconcerting is that they are tracking together.
4. In Addition to the PMI Numbers, New Orders Have Fallen Off the Table
5. Most Concerning: Personal Credit Card Debt Is Soaring While Personal Savings Rates Falls Drastically
Again, the chart tells the story. Personal finances have gotten demonstrably worse since early 2021.
Retailers such as Walmart, Target, and Kohl's pushed their entire sales event calendar earlier to entice shoppers to buy before the Black Friday weekend rush, and many Black Friday sales continued through Saturday, November 26. Was it enough? In the end, consumers spent $5.29 billion on Thanksgiving Day, a 2.9% increase over last year (per Adobe). Sustained inflation north of 5% means we need a continued push, especially with small businesses, to avoid catastrophe.
So, let’s all appreciate a little Christmas commercialization this year. We need it to avoid what could be a very unsettling 18 to 24 months going forward. Eartha Kitt, became an international star and earned two Tony nominations, a Grammy nomination, and three Daytime Emmys. Perhaps my favorite aspect of her career was her 1967 stint as Cat Woman opposite the great Adam West in the Batman TV comedy. But in the end, this accomplished woman became the foremost icon of Christmas commercialism with “Santa Baby,” and in fact died on Christmas Day in 2008.
A lot of bad things happened in 2008, we could use a little Eartha Kit spirit to avoid a repeat of 2008 in 2023, if it’s at all possible.
Werner Graf is the Chief Customer Officer of Visionet and a member of the CGT/RIS Executive Council. Visionet specializes in IT and digital innovation.