The US Retail Industry, Once Seen To Be Declining

Data released by the US Department of Commerce in July 15th showed that household consumption in the United States has risen sharply, benefiting from the long-term growth of employment and the slow rise in salary.

The data showed that in June, retail sales in the United States increased by 0.6% compared with the previous month, much higher than the previous survey forecast of 0.1%.

The release of this data was interpreted by the market as a good growth of the US economy, which led to a slight rise in the US oil market.

BobKeiser, vice president of S&PGlobalMarketIntelligence financial market research, said: "American consumers are the backbone of economic recovery.

We are creating job opportunities and wages are increasing.

These are very solid fundamentals for consumption and retail. "

Commented that the performance of the data is much better than expected, mainly due to the increased purchase of motorcycles and other items by the American public.

In addition, the recent US stock market is booming.

The improvement in performance and the rise in wages have played a supporting role in retail sales. The data indicate that the US economy has begun to pick up in the second quarter.

But in contrast to US retail data, the official statistics released by the British Statistical Office on July 21st showed that retail sales in the UK fell by 0.9% in June.

That is more than 0.6% of what economists had expected.

This disadvantaged data once again attracted people's concern about the impact of Britain's "off Europe".

Lloyd, director of retail banking at LloydsBank, said: "the abnormal weather in June, coupled with the disturbance of the referendum to the market and the price of a spiral downward trend, is a perfect storm for retailers." (KeithRichardson)

According to the commentary, the weakness of retail sales in Britain in June was mainly due to the unexpected decline in sales of food stores and petrol stations and sales of other products such as computers, toys and jewellery, which has cast a shadow over the signs that British consumers can promote economic growth.

In addition, KeithRichardson believes that "

The industry suffered the most severe blow, and rainy weather did not help summer clothing sales, and it had already experienced a bleak spring and a mild winter.

The statistics office also said that retail sales continued to decline over the past year, causing inflation to be close to 0.

The retail industry that was once seen to fade away

But do beautiful numbers predict America?

From then on, we can go all the way forward and start a period of rapid recovery. This conclusion is still too early for the international economic situation to be turbulent.

Also in the first half of this year, many well-known retailers in the United States still had many poor performance and lay offs. This is also a good contrast with the good retail sales data of the two quarter.

In early 2016, WAL-MART, the world's largest entity retail chain, announced that it had closed 269 stores worldwide, including 154 stores in the United States, 60 in Brazil and 55 in Latin America.

Although the proportion of this shop only accounts for about 1% of the total number of WAL-MART stores, WAL-MART has been the largest number of stores in recent years.

The quarterly results of Sears, the largest department store in the United States, ended in late April showed that the company's losses had expanded to $471 million, much higher than last year's loss of $303 million in the same quarter.

Its quarterly operating income was $5 billion 390 million, down 8.3% from the same period last year.

The company's same store sales fell 6.1%, of which Kmart sold 5% of the same store, while Sears's same store sales fell 7.1% year-on-year.

Macys (Messi department store) is also a famous department store in the United States, but its sales have dropped for five consecutive quarters. At the beginning of this year, it announced that it had closed 40 stores and laid off 4800 people. In June 23rd, it announced that the incumbent CEOTerryLundgren will be stepping down next year.

In the first quarter of this year, its net income was $115 million, down from $193 million a year ago, and its total income was $5 billion 800 million, down from $6 billion 200 million a year ago, and lower than that of the research company's FactSet forecast of $5 billion 900 million.

In addition, its same store sales fell by 5.6%, and earnings per share fell to $3.15 -3.40 US dollars, less than expected.

Shares of the company have fallen by 44% in the past year.

Target (Taghit), a once famous retailer, has achieved an increase of 1.2% of the same store sales in the first quarter, but the growth rate is still below the expected 1.6%. Its total sales fell 5.4% to 16 billion 196 million US dollars, down from the 16 billion 320 million US dollar forecast.

A spokesman for J.C.Penney (Peng Ni department store) said at the investor conference earlier this year that the group will close 7 stores this year.

In fact, in the past two years, J.C.Penney is the most frequent department store in the United States.

In 2014, Penny Department closed 33 stores and cut 2000 employees.

Last year, the company closed 39 stores.

Up to now, the company also operates 1020 stores.

Nordstrom, a senior department store in the United States (Nodes Tron), cut more than 400 positions in April on the basis of the adjustment of its business model after reducing the size of the scientific and technological team (120 employees) in March.

Nordstrom's first quarter earnings were extremely miserable.

According to CNBC, the Wall Street Journal reported that in the past 6 quarters, Nordstrom has had 5 quarters of earnings worse than expected, and its share price has fallen 41% in the past year.

Compared with the above companies, there is a more pressing situation -- SportsAuthority, a veteran sporting goods retailer in the United States, has 463 stores in the United States. Because of the competition of e-commerce, the long-term debt service has accumulated to $1 billion 100 million.

In early March of this year, it declared bankruptcy. It said it would close all stores and start liquidation.

Similarly, analysts are not optimistic about the future of the US retail industry.

In a report earlier this year, analysts believe that the US retail industry will lay off 24 thousand people in 2016, the highest level since 2010.

According to data analysis, in a worse case, the number of layoffs in the US retail sector in 2016 was more than 37000.

More analysts believe that this prediction is still too conservative, because a large number of retailers have recently filed for bankruptcy.

Retailers' layoffs are usually caused by profit pressures and slow sales.

In the current situation, traditional retail stores are also influenced by consumers turning to e-commerce.

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The overall industry is developing well.

However, the US retail market did not appear to be expected by market analysts.

In April, the US retail data increased by 1.3%, the largest increase since 2015 March.

Market analysis shows that the improvement of family financial situation makes consumers still have capital to increase spending. This undoubtedly helps retailers such as Messi to raise profits after a disappointing 2016 opening.

GennadiyGoldberg, an American strategist, said before the data release, "consumers should still have enough money to spend. They have saved some of their money, reflecting that they must have a large amount of money as backing."

Data showed that 11 of the 13 main sales categories were growing, and the demand for grocery stores and online traders increased by nearly two years.

In May, driven by automobile, catering, clothing and online sales, US retail data continued to perform well, with a 0.5% increase in the chain, indicating a rise in US consumption growth momentum.

From the point of view, the US auto sales increased by 0.5% in May, and the sales of food and clothing increased by 0.8% respectively. Sales of sporting goods, books and music products increased by 1.3%, and online sales increased by 1.3%.

Excluding the volatile car sales, US retail sales increased by 0.4% in the month.

Now, with the June retail sales figures, we can say that the US retail industry has achieved fairly good results in the second quarter.

This is really a far cry from the first quarter of the year.