Over the past year, or so, I've refrained from saying much on the deal that is supposed to bring a Lowe's to Curran Highway. Truth be told, I've got mixed feelings. Competition is the American way, but huge multi-national corporations competing with much smaller regional and local operations leaves a bad taste in my mouth. I moved away from urban/suburban mega-store sprawl and I much prefer the small town version of retail.
But this post isn't about my thoughts on unbridled corpratization. No, it is about something I wrote in some blog's comments when the North Adams deal was announced last year. I can't find the original comment right now, but I wrote something to the effect of
'I'll believe the store is opening only after the ribbon is cut simply because the housing market is getting ready to crash and Lowe's depends on contractor business.'
And today I read
This morning, Lowe's reported same-store sales declined 7.6% for the quarter.
But sequentially sales are even worse.
From the Lowe's conference call:
Same Store sales fell 4% in November (YoY)
Same store sales fell 9% in December
Same store sales fell 11% in January
CEO Niblock said he was "a bit surprised" by the weakness.
I am not saying that Lowe's is going to pull the plug on opening new stores, but it is straight out of Business 201 that if your existing operations are contracting, one of the first rounds of belt tightening tends to be preserving capital. In plain language, if your income goes down, you start watching your bank account a lot more closely and pinching pennies.
I suspect that getting the North Adams store built and open will be race against the clock. Too many bad quarters for Lowe's and a weak commercial real estate market for the developer, combined with global credit crunch for both, might just turn the carriage back into a pumpkin.