Retail Troubles: It Isn’t Just About Amazon 

A strong retail-sales report reveals just how deep a funk traditional retailers are in


The problem major retailers face isn’t so much that consumers have become more cautious, but that consumers are directing their spending elsewhere. And that is much, much worse.
On Friday the Commerce Department reported that retail sales—a category that covers not just traditional stores, but also businesses such as restaurants and online retailers—rose a seasonally adjusted 1.3% in April from March. That marked the largest increase in over a year, and stood in contrast to a string of retailers that reported disappointing results over the past week, including J.C. Penney, Nordstrom, Macy’s and Gap,
A chunk of the April retail-sales gain came from a rebound in sales at auto dealers and gasoline stations. But the sales for the “control group,” which excludes those categories (as well as restaurants, bars, and building-materials and garden stores) and which is a proxy for the underlying pace of consumer spending, rose 0.9%.
As result, economists raised their forecasts for second-quarter gross domestic product. Upward revisions to control-group sales for February and March also suggest the disappointing first-quarter GDP figures the Commerce Department released last month will be revised higher.
But the details of the report showed the uneven contours of where spending is growing. Sales at department stores, for example, rose by just 0.3%, putting them 1.7% below their year-earlier level. And while clothing- and accessory-store sales bounced 1%, they were only up 1.3% on the year. That compares with a 3.6% annual gain in control sales.
Meanwhile, sales at nonstore retailers—a category that includes online retailers such as—continued to take market share, rising 2.1% on the month and 10.2% on the year.
Retailers’ problems go deeper than shifts in where consumers are buying goods. One is that prices for many of the things they sell are rising more slowly than overall prices, or are even falling.
Apparel prices, for example, were down 0.6% from a year earlier in March, according to the Labor Department. So even if apparel retailers manage to sell more items, it is hard for them to generate sales gains. And with wages and other costs rising faster than prices, profit margins are coming under pressure.
Further, Americans are directing an increasing share of their spending on services. Over the past decade, for example, total consumer spending on clothing and footwear has risen just 1% annually, unadjusted for inflation. Spending on cable and satellite television and radio services has increased at a 5.1% rate.
That partly reflects a change in attitudes that came about in the wake of the financial crisis. Not only are people being more careful about spending, they are being careful about where they spend. In many cases they are opting for experiences like going out to restaurants and taking vacations over accumulating more stuff.
 Unless that changes—and there’s no sign that it’s about to—retailers’ woes will continue.

0 comentarios:

Publicar un comentario