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Meh. So Target is closing less than 1% of their stores in underperforming areas. Actually that sounds smart management to me. They're probably cutting their losses and avoiding unfavorable leases and ensuing debt. At least one company learned from Circuit City.
Retail isn't going anywhere. Grocery shopping and clothes shopping is still inconvenient online. It's a major hassle to buy clothing online then have it not fit and send it back. Buying food is problematic too. The stores may get more compact to save money on leases and overhead, but I expect the shopping experience will still be going strong for the rest of our lifetimes.
It's like books. Everyone thought e-readers were the death of books. They did reduce print book market share but now e-reader penetration has plateaued. Turns out that readers that use Kindles, Nooks, tablets, etc... still buy print books now and then, and most e-reader buyers got them as a supplement to their books, not to replace them.
Retail isn't going anywhere. Grocery shopping and clothes shopping is still inconvenient online.
I disagree. We have been buying our non perishable groceries at Walmart.com for over a year.
In the town we live in, we have a great independent grocery store, with only one problem. Non perishables in the majority of the things we buy are way higher here. Example we buy several bottles of Alfredo Sauce every month. At the local store it is $4.49 per bottle. Same bottle from Walmart on line is $2 which last order of 8 bottles (we have a large pantry and stock ahead) we saved $20 on that one item alone buying on line instead of at the local store. We have found a lot of the items we buy, are as much as 20% lower on line than at the closest Walmart store.
Walmart and major brand grocery stores are 50 miles away. It is an hour to get to the stores by car, and costs a round trip $15 for gas alone. If you figure depreciation and upkeep they figure it costs 50 cents a mile to drive today, which would be $50 travel costs. It takes an hour to drive to one of the other stores. That is two hours travel time. It takes about 3 times the time from arriving at the store till leaving, that it takes shopping on line. We also have a much bigger choice than at any store. We don't have to take a cart of groceries to the car to unload it into the car. Order it and within 5 days have it delivered to our front door. A couple in mid 80s, save all the trouble of going around the car and we are tired by the time we get home. We save a lot of valuable energy shopping for groceries on line.
We are not the only ones that do this. We know numerous people that shop for their non perishable groceries on line, saving them time, expense getting to a store and back, a lot of time, and especially a lot of money. We know women with young children, that feel they really blessed, being able to do their major grocery shopping while a child naps, instead of having to bundle up the children, going out and doing heavy shopping trying to care for children at the same time, and save a lot of money in the process.
I have spent all my life in the business world, and have watched the changes taking place. Stores that did not change, go under, and those that change prosper.
A lot of major market stores such as Walmart as mentioned above, are changing with the times and moving heavily into on line sales. They are moving from huge stores, to what would be considered middle size a few years ago, and concentrating in on line sales. They are getting rid of the high rent huge stores, as this new part of the business is what will drive their businesses in the future.
Stores that do not change with the time, will be going out of business. Montgomery Wards is one example of a major chain that did not change with the times. They are long gone.
We have to consider why Walmart profits will be lower this year. Not that the overall sales will decline, but that money is being invested for the future. They are increasing the cost of labor considerably, including a tremendous new floor managers, etc. They are investing a lot of money in E-Commerce and this area of their business is growing rapidly. Now that they have the problems figured out,, they are spending a ton of money to make an even better warehousing and delivery system, along with improving the order system. They are investing in 2016 and 2017 preparing for a big jump in sales and profit in 2018. To do what they expect in only 2 years, is exceedingly quick for retail.
Amazon and Walmart are in a fight to be the best for Black Friday in a few days. No one can even predict which will win. One will be #1 and one #2 in the business.
Walmart is reducing profits for the next 2 years, to be able to take a tremendous increase in E-Commerce sales by 2018. There is an old saying in business. You have to spend money to make money, and Walmart has the money to spend to reach their goals.
You get your finance news from ZeroHedge??? I suppose you think Breibart is a legitimate news source and that Jade Helm 15 was just the government positioning itself to round up all the "opposition" and throw them into Wal-Mart *** prisons?? I don't trust financial news from conspiracy theorists or anyone who refuses to put their own byline on an op-ed. (Or people convicted of insider trading and banned from working in finance, as is the case with the gentleman who is behind this site).
There are so many issues with the article you posted and the nonsensical graphs in it. You can torture data to tell you anyhing you want, but it doesn't make that story true.
Macy's poor results yesterday were a reflection on Macy's, NOT the American consumer. As someone who is in the business, I can tell you Macy's has a ton of issues (broken promotional cadence, way too much store inventory for longer than just Q2/Q3, distractions from core business model like off-price initiative and acquisitions, reorganizing merchants in Q1 that left nearly every single buyer / merchandise VP in a brand new job, etc). Sales figures released this week by Kohl's and JCP show that the consumer IS spending, just not at Macy's. Target's sales should be positive, too, as their stores look fantastic again. That Macy's call yesterday was nothing more than 90 minutes of excuses.
I will give you that luxury stores like Neiman's are hurting because their customers are "wealth" focused, not "paycheck" focused. When the luxury customer perceives their wealth is threatened (volatile stock market, Fed uncertainty, etc), they pull back on discretionary spending immediately. Having worked in those companies, sales rise and fall with the stock market. August was abominable, with sales ticking up in October as the market had 4 straight weeks of gains. The Macy's/ Kohl's/ Wal-Mart customer is paycheck focused- as long as she has a paycheck, she spends. Job market is strong enough now that her paycheck feels secure.
If the entire nation does not get some very cold weather soon, holiday sales are going to be tough because people aren't buying the higher AUR coats, sweaters, boots, flannel sheets, etc that drive so much of the Q4 sales volume. That doesn't mean the consumer doesn't have money; rather she sees no need to buy the kids new coats this year when it's still 65 degrees in NYC, 80 degrees in Dallas, etc. She may not be blowing that $150 elsewhere right now because she knows she will eventually need to buy those costs when the cold weather comes.
I don't think Amazon is taking share from ordinary grocery shopping or monthly haul.
Amazon is threat to consumer electronics sellers, particularly Best Buy.
Overall retail is in recession.
This year holiday sales will be down significantly from last year.
Including electronic commerce.
I now buy a lot of grocery items on Amazon through Subscribe and Save, they get delivered automatically. They also DO have regular grocery items including things like meat and milk now, it's called Amazon Pantry. It gets delivered with dry ice for like $5, hard to compete with that.
I admit I also sometimes go into stores like Staples and find what I want, then go buy it on Amazon for $15 less. I do not mean electronics but things like ink and plan books.
I was about to write the same thing. It's the financial equivalent of Godwin-ing a thread with a Hitler/Nazi reference. Gather your gold bars. The US dollar is going to crash. Prepare for the Zombie Apocalypse.
I still buy groceries from brick & mortar stores and consumables at Walmart/Target but I use Amazon for most everything else.
What I should probably do is spend a couple of hours doing a detailed price comparison between Amazon, Walmart, and Target for the 30-ish branded consumables I buy all the time.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Even if the prices are a little higher, Amazon Prime free and fast delivery makes it well worth it in time and gas savings, not to mention not having to wait in line to deal with the script trained cashiers and listen to "did you find everything?" or "how is your day going so far?" when they don't really care.
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I suppose you think Breibart is a legitimate news source and that Jade Helm 15 was just the government positioning itself to round up all the "opposition" and throw them into Wal-Mart *** prisons?? I don't trust financial news from conspiracy theorists or anyone who refuses to put their own byline on an op-ed. (Or people convicted of insider trading and banned from working in finance, as is the case with the gentleman who is behind this site).
