Is the retail sky falling?
Reading some of the headlines and listening to some of the pundits lately, you couldn’t be blamed if you concluded that all is doom and gloom in retail. But is it really?
There’s no doubt that a number of retailers including Gap, Kohl’s, Macy’s and Nordstrom have posted disappointing, even dismal, earnings in recent weeks. Calls have come through for department store and specialty chains, particularly those in malls, to drastically reduce store counts.
Others, such as Aeropostale, have recently filed for bankruptcy. Sports Authority was another to go that route and the chain’s management made the decision to liquidate rather than reorganize as originally intended.
If you’re not depressed yet, that’s good because while there is no doubt that American consumers remain cautious when it comes to spending their hard earned dollars, recent sales figures suggest there is cause for optimism.
Last week, the Commerce Department reported a 1.3 percent gain in retail sales for April. While subject to change, it’s worth noting that the monthly jump was the highest achieved in 13 months and included gains in autos (3.2 percent); gas (2.2 percent); food and beverage (0.9 percent); furniture (0.7 percent); clothing (one percent); health and personal care (0.9 percent); and online (2.1 percent).
A number of companies, including Amazon, Home Depot and TJX, have posted strong, better than expected, sales and earnings figures.
More good news came via the latest government figures on housing starts and industrial production, with April proving to be a strong month for both. Economists, according to reports, are looking for the nation’s GDP to rebound this quarter.
- Retail sales post biggest rise in 13 months – USA Today
- Department Stores Face Rising Competition – Seeking Alpha
- Retail recession? Why Kohl’s miss was so huge – CNBC
- T.J. Maxx owner raises forecast as shoppers hunt for bargains – Reuters
- Strong U.S. data bolsters second-quarter growth prospects – Reuters
DISCUSSION QUESTIONS: Are you bullish or bearish on the current state of the broad retailing industry? What factors – economic, social or otherwise – do you expect to have the greatest impact on retail results over the balance of 2016?