Financial Advice for Retirement, Social Security, IRAs and Estate Planning

Analyzing the Retail Puzzle

April 18, 2017

The economy continues to grow, and consumer sentiment surveys are near historic highs. Yet, retail sales aren’t increasing much and recently decreased on a real (after inflation) basis. Also, retailers are closing stores or going bankrupt in droves. What’s going on. Recently I linked to an article that argues government retail data doesn’t accurately capture buying behavior; we’re buying more services than hard goods, for example.

Here’s another article that gives three reasons retail is in trouble (including that there are too many stores). This New York Times article paints the picture of the troubles retailers are having today.

So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.

 

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