Carnegie Market Blog

 

Retail Is Struggling Financially - Current Inflation Numbers are Out

Posted by Brent Luce on May 12, 2017 3:02:33 PM

Retail Death Spiral

If you have not noticed, brick-and-mortar retailers have not been doing so well.  Value investors who have been trying to “bottom-fish” in the space have continued to suffer.  As we know, Amazon and other companies using and benefiting from new technologies have been perhaps the most disruptive force ever to affect consumer buying behavior.  As I have mentioned before, we seem to be arriving at the breaking point where the weak can no longer fight the battle.  This is just one example of how new technologies are changing the way we live and affecting every business and sector.  When looking at investments, I think there are two types of companies – those poised to benefit from these disruptive forces and those who are likely to suffer from it.  The table below, which I am borrowing from MKM, shows the number of store closings announced just this year – this is just major stores, and does not include the hordes of smaller retail stores that have closed.  Amazon has been taking over fifty cents of every new dollar moving into retail e-commerce, so we can guess that 50% of these sales are going right into Amazon’s pocket.    At the bottom you will see the stock price charts of traditional retailers versus Amazon; it is self-explanatory.  Deep Dive:  The New Retail Ecosystem

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Topics: Inflation, $AMZN, Big Data, Amazon.com, Technology, Retail Distribution

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