Companies that cater to the public by selling various goods are called retailers. This encompasses both large and small stores. Investors look at fashion trends, sales per square feet, the potential to open more stores, inventory levels, and same-store sales data, as well as the ability of retailers to generate loyalty among their customers. Looking at them as a whole, retailers can provide a general idea about consumer spending. If they are selling more, it is considered to be a good sign; when they are selling less, it means consumers are struggling, and there may be rough roads ahead for the economy.
A good gauge for me on how consumers in the U.S. economy are faring has always been the statistics coming out of Wal-Mart.
Wal-Mart Stores Inc. (NYSE/WMT) reported its operating income in its second quarter (ended July 31, 2014) declined by 2.4%. Its subsidiary, Sam’s Club (wholesale store), saw its operating income, after taking… Read More
In the first quarter of 2014, Retail Metrics, a retail industry research firm, found U.S. retailers missed their corporate earnings estimates by the most since the year 2000!
As I have been writing, consumer spending only increases when consumer confidence is rising. Unfortunately, in the U.S. economy today, that confidence is pl… Read More
Straggling earnings reports are revealing more weather-related issues for specific industries (home improvement, for example), but several retailers have been posting really good numbers.
Tiffany & Co. (TIF) soared on news of its fiscal first quarter producing global sales growth of a solid 13% to $1.0 billion. Bottom-lin… Read More
An economy is said to be technically in a recession when it experiences two consecutive quarters of negative gross domestic product (GDP) growth.
The biggest portion of the U.S. GDP calculation is consumer spending; then comes investments, government spending, and, finally, net of exports. By far, consumer spending is the bigges… Read More
In 2013, consumer spending accounted for 67% of U.S. gross domestic product. (Source: Federal Reserve Bank of St. Louis web site, last accessed April 2, 2014.) It’s plain and simple: economic growth cannot be achieved unless consumers are spending.
And unfortunately, higher prices and lower discretionary spending are putting… Read More