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Retailing has never been an easy business. Consumer tastes and preferences are ever changing. In a recent report by Fidelity Investments, they note the trend in foot traffic at malls has been on the decline over the past three years.

From The Blog of HORAN Capital Advisors

The report notes a number of factors are likely causes attributable to fewer shoppers frequenting malls, of course the weather is cited as one of those factors this year. More systemic reasons are probably influencing this behavior as well with the report noting,

"The growth of mobile devices and the increased accessibility of online pricing have helped fuel increased Web sales. Through the first three quarters of 2013, e-commerce sales increased by 17.4% over the same period in 2012 [according to the U.S. Census bureau]. Today, consumers increasingly turn to their smartphones and tablets to comparison shop on multiple sites simultaneously, rather than travel from store to store for the lowest prices. Purchases can often be delivered within a day or two, at either a nominal shipping expense or free of charge. Further, merchandise returns have been streamlined, as many e-commerce retailers send prepaid return shipping labels to customers with their purchases, removing yet another obstacle to shopping online."

In spite of the potential difficulties facing retailers there are retail segments that seem to be navigating this transition favorably, in the opinion of Fidelity.

  • Retail destinations catering to a healthy lifestyle.
  • Housing-related retailers.
  • Warehouse clubs with a varying general merchandise offering.
  • Fast casual restaurants.
  • Dollar stores and off-price retailers
  • "Fast-fashion" retailers.

More detail can be found in the Fidelity report link above.

Disclosure: No positions