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Retail watch: Sales hard to ring up outside of auto and healthcare

  • Economists forecast retail sales rose 0.4% in August which will mark a slight acceleration from July's pace, although they note auto sales likely accounted for a good portion of the month's momentum.
  • The early read on September for U.S. retailers is that a continuation of weak mall traffic and a heightened promotional stance is occurring.
  • By sector, retailers with a mix of healthcare products (WAG, COST) or sitting in the sweet spot where consumer "trade down" (TJX, ROST, SIG) to their products are holding up better than many apparel sellers (AEO, ARO, LTD, GPS, M, KSS).
  • Related ETFs: XRT, RTH, PMR, RETL.
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Comments (7)
  • BruceInKY
    , contributor
    Comments (438) | Send Message
     
    I've been seeing very slight gains in sales y-o-y in my retail business. Unfortunately, they seem to be the result of price increases and are more than offset by increases in my fixed costs.
    8 Sep 2013, 10:57 AM Reply Like
  • davidbdc
    , contributor
    Comments (3184) | Send Message
     
    I can relate to that situation.

     

    Íts been my own personal opinion for a while now that outside of population growth this pretty much it. I keep major expenditures to a minimum. Several years ago I was upfront with my employees that health care cost increases were basically their pay increases.

     

    There is little reason to be taking large risks. Permits, reviews, inspections, mandatory studies, required filings - the list goes on and on. Between the stagnant economy and the tiresome government nonsense you reach a point of wondering why you bother. Not the environment for economic growth.
    8 Sep 2013, 03:33 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1586) | Send Message
     
    Reinforces my belief the jump in auto sales was a satellite phenomenon of the jump in home sales which was driven by the gravitational pull of higher interest rates in the offing.

     

    I have a strong feeling auto sales are going to cool off big time as the boomer gray, cars last longer than ever (150k miles the new norm??) and as more and more young people migrate to the urban areas on the East and West coast.

     

    These structural issues are not going to be offset by one month of auto sales accompanied by hysterical cheering on CNBC.
    8 Sep 2013, 12:43 PM Reply Like
  • gsterling
    , contributor
    Comments (831) | Send Message
     
    The auto manufacturers don't seem to believe this was a short term trend. Regarding the boomers they are first starting to retire and they even have an article in the last BusinessWeek which talks about how the boomers are the ones purchasing new cars the most. With people living longer and more active lives I don't think the baby boomers are giving up their cars any time soon. Most 'urban' areas except for NYC require cars to get around. I'm in Palm Beach, Florida and I wouldn't be able to function without a car here or in Miami.
    8 Sep 2013, 01:22 PM Reply Like
  • justaminute
    , contributor
    Comments (1022) | Send Message
     
    Funny cost of gas is backed out of the inflation numbers, but they are relying on the sale of cars to make retail sales look good.
    8 Sep 2013, 12:58 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1586) | Send Message
     
    Don't forget food is also not included in the CPI. So about 75% of the non-housing money spent by an average family each month - on food and energy - is conveniently not included in the CPI. But that $20 blender you buy once every five years at Walmart - that is what determines the CPI.
    8 Sep 2013, 01:04 PM Reply Like
  • justaminute
    , contributor
    Comments (1022) | Send Message
     
    Yes that is quite silly.
    8 Sep 2013, 01:15 PM Reply Like
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