The Arrival Of Us "Retail Doomsday": Economic Slowdown? Electricity Supplier Impact?

With the advent of "retail doomsday", the US retailers are closing in: the economic slowdown?

Electricity supplier impact?

On Monday, the US stock market opened up in the second quarter, the Dow Jones industrial average rose 1.27%, the US Standard & Poor's 500 index rose 1.16%, and the Nasdaq composite index rose 1.29%.

The rise in US stocks was mainly due to the strong performance of manufacturing data in the US and China, temporarily relieving the market's worries about economic growth.

However, it is important to note that on Monday, investors were overlooked by the investors, and the US retail sales data released in February on the same day with strong US manufacturing PMI data.

This data shows that the US retail sales in February fell by 0.2%, less than the expected increase of 0.3% and the previous value of 0.7%.

The US economic outlook is aggravated by worries and has an impact on the retail industry.

Retail sales accounted for 70% or more in the US economic system. In December 2018, the figure fell 1.2% over expected. Although the expected rebound in January, the US retail sales in February declined again, which brought an ominous warning for the first quarter of the US's economic growth.

In addition, earlier this month, the US US bond yield in March raised the 10 year US bond yield, which is the first time that the yield curve has been upside down since 2007 and has also raised concerns about the US economy going into recession.

A series of indications are implying that the US economic outlook is very heavy. For the US stocks, the larger impact sectors include retail stocks. In the past quarter, the retail index ETF-SPDR NYSE:XRT has risen nearly 10%, but it is lower than that of SPDR's S & P 500 (NYSE:SPY) 14%. In March, the ETF fell by nearly 2%, which was also weaker than that of S & P's rise of nearly 2%.

Is America's "retail doomsday" coming?

Only 5399 stores closed in the first quarter

Data from Coresight Research, a retail technology consulting firm, showed that in the first quarter of 2019, the US retailer industry had closed 5399 stores.

In 2018, there were only 5726 stores that were closed.

A report from Challenger, Gray & Christmas, a research firm, shows more startling data on the US retail industry.

The report revealed that in the first quarter of this year, the US retail sector has laid off more than 41 thousand people, a 92% surge over the same period last year.

This is just a prelude to this year's US retail layoffs.

Penny (1.455, -0.02, -1.02%) department store (NYSE:JCP) just announced this week that as part of its annual staff assessment standard, the company will close 18 stores on the basis of the previously announced closure of three stores.

Meanwhile, Lifeway Christian Bookstores, a well-known chain store in the United States, announced last week that it will close 170 stores in the United States. The company CEO said that we hope to retain some stores, but the current market situation has determined that we can not do so.

In addition, at the beginning of the March, the secret brands Victoria, s Secret and GAP, NYSE:GPS of the famous American underwear brands in Vitoria also announced that they had closed more physical stores. Overall, the total number has exceeded 300.

It is worth noting that even the US retail giant WAL-MART (97.86, 0.04, 0.04%) (NYSE:WMT) also announced the closure of stores. According to NBC, WAL-MART will close at least 11 stores in 8 states of the United States.

These stores include WAL-MART supermarket located in Luis Anna Slafayette, and WAL-MART community supermarket in Arizona, California, Kansas, South Carolina, Tennessee, Virginia and Washington.

In February, the US retail data report showed that 7 of the 13 main retail categories were in decline, of which 4.4% of building materials and gardening supplies declined the largest decline since April 2012.

Sales of food and beverage stores fell by 1.2%, the biggest decline in ten years.

Meanwhile, sales of electronic retailers fell by 1.3%, the biggest drop since May 2017.

Sales of department stores, clothing stores and furniture stores also suffered setbacks.

The impact of electricity providers on traditional retailers is bigger: people have not stopped spending, but have changed the way of consumption.

Financial blog Zerohedge pointed out on Monday that the weakness of the retail industry can not be attributed to the impact of the electricity supplier, because the Internet retailing industry currently accounts for only 10% of the total retail sales in the US.

However, in the past earnings season, the US retail listed companies reported mixed earnings, showing a different picture for investors.

According to the observation of Jesse Cohen, an exclusive analyst at Investing.com, the retail industry in the fourth quarter of 2018, which has strong performance, mostly studied the online sales strategy competing with Amazon (1811.2485, -2.94, -0.16%), and found the right product and service mix to attract visitors from the store.

On the other hand, retailers who fail to keep up with the changing tastes and buying habits of American consumers are facing a dilemma of declining performance.

Even President Trump has repeatedly stressed the dangers of Amason (NASDAQ:AMZN) to traditional stores.

He believes that Amazon is a great danger to these stores.

Lifeway Christian Bookstores Brad Waggoner, the chief executive of the above mentioned, admits that closing the store is a tough choice, but we must embrace digital and electronic commerce.

Ron Johnson, chief executive of Enjoy, a retail technology company, has also said that in the post digital era, only the strong can survive.

You need a great brand, a strong balance sheet, and an experience vision that starts with digitization.

This is the evolution of the times.

Ron Johnson was previously the head of retail business of apple (192.45, 1.21, 0.63%), and he opened the first Apple store and expanded its store to 1200 stores.

Matthew Shay, chairman of the National retail Federation, also said there is no doubt that consumer preferences and new technologies have changed, and the retail industry is undergoing rapid pformation.

To seize this trend, embrace e-commerce, and complete the physical store shopping experience reshaped retailers will be successful retailers.

Bankrate Mark Hamrick, a senior economic analyst, points out that consumers do not stop spending, they just change the way they consume.