Retail Sales

Why U.S. Retail Sales Dropped in January – and How You Can Profit

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U.S. retail sales - which account for 70% of economic activity - unexpectedly fell 0.4% for the month of January according to the Commerce Department today (Thursday). The decline marks the second straight drop after a 0.1% fall in December.

Auto sales were the major contributor to the miss. Sales of motor vehicles and parts dropped 2.1%, while Americans also spent less on restaurants and clothing. The report also showed soft holiday sales for retailers at the end of last year.

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Can Improved U.S. Retail Sales Continue In 2013?

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The Commerce Department released its U.S. retail sales survey for December this morning (Tuesday) showing an unexpected increase - but does this gain have enough support to repeat in 2013?

Total retail sales were up by 0.5% compared with November, more than doubling the 0.2% average growth forecast by economists surveyed by Bloomberg.

The department noted U.S. retail sales would have been up by 0.8% if it had not been for a 14 cent-per-gallon decline in the average price of gasoline, which resulted in a 1.6% drop in sales at gas stations.

Why U.S. Retail Sales Improved

The increased U.S. retail sales came as an improved employment picture boosted incomes.

At the same time, housing prices are beginning to recover nationwide and this has led to an increase in housing construction activity. That's because a better outlook for housing construction means more demand for pickups and other light trucks.

"There's a big correlation between auto sales and housing starts," GM Treasurer Jim Davlin told Reuters. "The pickup truck market share is at historical lows. We would expect that to come back."

Sales of autos and auto parts were up by 1.6% month-on-month, the best performing category within the retail sector. December capped the best year for automobile sales since 2007.

U.S. retail sales excluding automobiles were up by 0.3%, also beating economists' estimates, compared with a 0.1% decline in November. Sales of furniture were up 1.4% from November while sales at clothing chains increased by 1.0%.

Core retail sales, which most closely correspond to the consumption component of gross domestic product (GDP,) also were up in December, by 0.6% after a 0.5% increase in November. Core retail sales exclude sales of automobiles, gasoline and building materials.

But the new tax law changes in 2013 threaten a continued recovery in U.S. retail sales...

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The Weakest Holiday Sales Growth Since 2008 Means It's Time to Short These Retailers

Initial U.S. retail sales figures released on Wednesday showed sales growth for the holiday season was the worst since 2008.

According to MasterCard SpendingPulse, holiday sales posted a paltry 0.7% increase against expectations of a 3-4% gain. That's below the same period last year when sales grew at a 2% pace.

Analysts looking for a convenient excuse have been quick to blame Hurricane Sandy. But in reality, there's something else much bigger at work here.

That's why I'm actively hunting for shorts in the retail sector right now and will be for much of the first quarter next year.

Following the holiday data and some moderate earnings that incorporate the extra week this quarter, I simply don't think hard-core retail companies like the The Gap (NYSE: GPS), American Eagle Outfitters (NYSE: AEO), The TJX Companies (NYSE: TJX), and Abercrombie and Fitch Co. (NYSE: ANF) – which are up 71.3%, 47.41%, 32.2% and 50.67% respectively year to date through Christmas Eve – will be able to sustain these big up moves.

In fact, there are several real reasons why I think holiday sales were down and consumer spending will continue to drop into 2013, making select retailers good short candidates:



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Black Friday Shopping 2012 Gets Even Crazier and Angrier

Black Friday shopping typically involves the most inventive, discounted sales of the year.

This year, with waning sales, stiff competition and the new trend of comparison shopping via smartphone apps, both brick-and-mortar and online retailers are pulling out all the stops to win over customers.

According to a recent consumer survey by the bargain website DealNews.com, just 2% of Black Friday shoppers will shop solely in stores, while 28% will shop purely online. But retailers aim to change that stat.

New services offered this year by brick-and-mortar stores include: reserved parking spots, complimentary food and drink, survival kits of energy bars, water and coffee coupons, safe stations that will hold people's packages while they peruse and spend, and security guard escorts who will personally carry loads of gifts to parked cars.

At Mall of America in Bloomington, MN, a tailor shop will check coats for a $1, with proceeds collected benefiting the Make-A-Wish Foundation and the Salvation Army.

Some of the more upscale stores are even offering VIP lounges where shoppers can nosh, nibble, receive complimentary goodie bags, and relax until they feel rested enough to again face the maddening crowds.

John D. Morris, a senior retail analyst with BMO Capital Markets told The Wall Street Journal of this move by retailers, "It's their way of telling shoppers, "We feel your pain.'"

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U.S. Retailers Hoping Black Friday Sales, Smartphone Apps Fuel Strong Holiday Shopping Season

Another Black Friday. Another holiday shopping season. But a whole new strategy for U.S. retailers. As the Friday after the Thanksgiving holiday, today marks the "official" kickoff of the 2010 holiday shopping season. Usually referred to as "Black Friday," today is the day when U.S. retailers traditionally pull out all the stops in an effort […]

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Brick-and-Mortar Retailers Moving Business Online as Foot Traffic Declines

U.S. retailers this year geared up for the annual back-to-school shopping season, the parents and children didn't fill the streets and shopping malls - they stayed inside, and online, cruising for bargains on the Internet.

Overall sales this August were up only slightly from last year, failing to give stores the boost they needed after a sluggish summer.

A report from MasterCard's SpendingPulse released yesterday (Wednesday) showed that consumers gave a slight bump to children's clothing and consumer electronics with their back-to-school shopping, but pulled back in other areas of merchandise which cut into sales gains.

But among uneven retail numbers this year exists a bright spot that has been growing for years, and is leading companies to overhaul their traditional business models: the online retail market.

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Three Ways to Brace for a Double-Dip Recession: Recession-Proof Stocks

Today (Friday) we conclude our series on bracing for a double-dip recession.

In Part I of this investment series, "Three Ways to Brace for a Double-Dip Recession: Going for the Gold," we discussed ways investors could safeguard against the imminent decline of the U.S. dollar by buying gold.

In Part II, "Three Ways to Brace for a Double-Dip Recession: Going Global," we explored potential investments in foreign countries that have more stable economies and better growth prospects.

And today, we're going to conclude by looking at "recession-proof" stocks right here in the United States.

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Barnes & Noble Sale Won't Rid the Retailer of its Woes

Barnes & Noble Inc. (NYSE: BKS) announced late Tuesday that it would put itself up for sale. But even with its recent struggles analysts aren't sure of what the company hopes to accomplish.

"There are companies that do this because they have to and there are companies that do this because they have impatient shareholders and I'm not sure what's driving this kind of statement," Michael Norris, a senior analyst at Simba Information, told The Associated Press. "It just seems daft."

The company's board said that it believed Barnes & Noble stock was "significantly undervalued" and that it had established a special committee to review its options.

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Consumers Buck Economic Trends to Help Retail Sales Post Fastest Growth in Four Years

The American consumer bucked strong economic headwinds to help retail sales post the fastest growth in four years, a report is expected to show today (Thursday), boosting optimism that shoppers are overcoming concerns about unemployment and a slumping housing market.

Sales are expected to come in at the upper end of a range between 3-4% for the first five months of the retail fiscal year that began Jan. 31, the biggest gain since 2006, the International Council of Shopping Centers (ICSC) said in advance of its June report.

The biggest gain in retail sales since 2006 could be a signal that consumers are weathering last month's drop in consumer confidence and are not as concerned as analysts feared about the economic rebound.

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We Want to Hear From You: Are Retailers' Stimulus Measures Persuading You to Spend?

Faced with a wheezing economy that can't seem to heal, big U.S. retailers like Target Corp. (NYSE: TGT) and Office Depot Inc. (NYSE: ODP) are creating their own stimulus measures to lure hesitant shoppers back into stores.

Through such tactics as loan programs, credit card rebates and gift card giveaways, top retail chains are rolling out promotional strategies, hoping to break consumers out of their anti-spending doldrums.

"A lot of the government programs have come to an end," David Bassuk, an expert from financial consultancy AlixPartners, told The New York Times. "So retailers are taking it upon themselves to do everything they can to get the consumer to spend, even opening up their wallets to give money back to the consumer."   

Sam's Club is taking an unusual approach: It's offering loans of $5,000 to $25,000 to its members, backed by the Small Business Administration. Superior Financial Group is managing the loans and will give Sam's members a $100 discount on the loan application fee and lower interest rates.

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U.S. Economy: Headed For a Second-Half Slowdown

Constant stock market volatility, a crippled job market and the troubles plaguing the European markets are starting to take their toll on the U.S. economy. After the major market rally of 2009, is the U.S. economy headed for a second-half slowdown... or, worse, the dreaded double-dip recession? Read this report to find out exactly what’s in store for the U.S. economy...

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Misguided Policy Paving the Way for a Double-Dip Recession

With unemployment still hovering near 10%, policymakers should be doing all they can to combat joblessness and reinvigorate a recovery that is showing signs of weakness.

But they're not.

Instead, they're reeling in stimulus measures and enabling a double-dip recession, simply for the sake of fiscal austerity.

The Labor Department is expected to report today (Friday) that the unemployment rate held steady at 9.7% in June, or worse, edged up to 9.8%. That would follow yesterday's (Thursday's) disappointing report that showed new claims for jobless benefits jumped by 13,000 to a seasonally adjusted 472,000. The four-week moving average, which smoothes out volatility, rose by 3,250 to 466,500 - its highest level since March.

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Money Morning Midyear Forecast: The U.S. Economy is Headed For a Second-Half Slowdown

Most textbook economists say that the U.S. economy is engaged in a broad-based recovery. But while there's a consensus that there's no "double-dip" recession on the horizon, the evidence suggests the nation's economy is headed for a slowdown in the second half of 2010.

The reason: In a market that derives 70% of its growth from consumer spending, the last half of this year will be all about those consumers - and about the economy's inability to generate enough jobs to keep the nation's cash registers ringing.

If you add to that concern the end of the various government stimulus efforts, possible fallout from the Eurozone debt contagion, and oil in the Gulf of Mexico defiling the shores of four states, you end up with an economic outlook that's clouded with uncertainty.

And that uncertainty will continue to stifle hiring and will result in another round of consumer belt-tightening - and a continued economic malaise.

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