A Reality Check For Retail

by MR Magazine Staff

About that retail revival. It might be less powerful than investors think. Strong second-quarter results from many retailers bolstered the optimistic view that industry bulls have been spinning this year. Stores have finally started to figure out Amazon.com developing clicks and mortar strategies that are helping them defend their turf against the online giant. It is part of why stocks of retailers have been among the year’s best performers. But Friday’s retail sales report suggests that the third quarter might not be as rosy as the second. The Commerce Department reported that overall sales rose just 0.1% in August from a month earlier, after rising 0.7% in July. That was the slimmest gain since January, when sales declined. The sales report hardly counts as a death knell for the American consumer, but it does suggest that the very strong retail sales figures from the three months ended in July, which coincides with the fiscal second quarter for most retailers, weren’t sustainable. Read more at The Wall Street Journal.