The Devil Lurking In The Retail Store Closure Details

Tyler Durden's picture

"US retail as we have known it for hundreds of years is in sharp decline," warns Bloomberg Brief's Rich Yamarone, adding that "market participants should take note of the fallout in a sputtering US economy." The retail apocalypse, as we discussed here, is dominated by mass layoffs, weak traffic, and poor wage growth and, as Yamarone highlights, it's not hard to see why...


Via Bloomberg Brief's Richard Yamarone,

The 13-week moving average pace of retail spending shown by the ICSC-Goldman Sachs Retail Chain Store Index is below that which traditionally signals a slowdown.




Of course this most recent dive will all be blamed on the weather but another look at the chart shows the trend was well in place long before this winter and will continue well into the future unless something changes. As Yamorone goes to note, this has significant implications - as the shift from bricks-and-mortar to online echoes up through the retail infrastructure of America...

That a lot of the cash not being spent on the high street will show up in online sales is scant consolation for operators of existing infrastructure. There are ripple effects for the towns that surround it, and awful consequences for retail associates and their families.


The need for retail employees is essentially limited to clothing and footwear stores since apparel and shoes are not standard items with varying sizes, colors, and fabrics. For the more ubiquitous items like electronics or sporting goods, the need for a dedicated store or staff is diminished. During February, the number of employees at electronics and appliance stores fell by 12,000 to 503,700, while sporting goods, hobby, book and music stores furloughed 8,600 workers.




Ordering online means reduced foot traffic at malls. The year-over-year change in the ShopperTrak’s month-to-day Retail Traffic Index contracted by 5.2 percent in February – a weak trend that has been lingering for the last 12 months.




Finally, while many high-ranking "economists" of the sell-side varietal would prefer to shove any and all negatives under the capret proclaiming them merely weather events - for instance here is Deutsche's Joe Lavorgna's tweet cloud from the last 40 days (h/t @Not_Jim_Cramer):

Yamorone has more ominous words by way of conclusion...

Economically speaking however, the bottom line remains fewer jobs, the ultimate determinant of income and spending. The broader decline of bricks and mortar retail, have to be factored into any serious forecasting of the direction of the U.S. economy.

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Bangin7GramRocks's picture

And more poverty stricken warehouse mules to fill the orders! USA USA USA

Obchelli's picture

And like clock work markets start rallyin perfectly after hitting red in stright line

max2205's picture

Lets make sure they get a bump tk 10.15 an hour....that'll finish it off

dontgoforit's picture

It ain't just the USA.  It's the west in general.

mumbo_jumbo's picture

LOL, yes cause an economy where 50% of Americans don't make enough to pay taxes is really working out.

min. wage WOULD be over $10 an hour if it kept pace with inflation, speaking of inflation a new worker in my profession with 3 years experience should make $31.50 an hour but in 2014 really makes $22 an hour.

so the REAL ISSUE at hand here is NOT online sales or the snow it's the simple fact that the average income no longer provides a means for the average American lifestyle and it's been this way for a long time so now the symptoms of that disease are finally starting to appear.

the GREED of US corporations have killed the host, and if this continues, look out below. Or as i read recently who the fuck are these boomers going to sell all these assets to during retirement? imported 3rd world peasants? the smaller cohorts of gen X,Y,Z??? WHO DON'T MAKE ENOUGH TO PAY TAXES?

this isn't rock science folks, it's just simple math.

DontGive's picture

Plenty of folks like me who will, ahem, buy them assets at pennies on the dollar. Then turn them into rentals, like this whole damned rental society. Could always use more on the plantation.


The way I see it, and not to throw salt on this generational divide bullshit, but the boomers are caught between a rock and a hard spot.


Cant beat em? Join em.

Groundhog Day's picture

Look at MCD, up 3.3% after reduced comp store sales yesterday.  Another fun filled day in the bizzaro market.

Headbanger's picture

"market participants should take note of the fallout in a sputtering US economy"

But but but.... Obama and Yellen and CNBC all said the economy is getting stronger and we just had better than expected jobs growth and.....

NotApplicable's picture

Which is then echoed by local media tards, who have not a clue what they're talking about.

The only fact they know is "corporations have more cash than ever."

Never mind that it's because there's no profitable reason to fund capex. Or, that the cash is being used to play in the "financial" space while gutting the company's infrastructure.

foodstampbarry's picture

The new American dream, fulfilling orders at an Amazon distribution center.

Cocomaan's picture

This was an article talking about how Amazon Warehouses are the new Factory in the midwest.


The idiocy was stunning. The two aren't even remotely equivalent.

foodstampbarry's picture

Agreed. Real wealth comes from producing stuff, not shipping cheap chinese shit out a door.


Skateboarder's picture

If all you do is consume, your definition of productivity changes accordingly. Amazing indeed, that the definition of a 'factory,' an entity that is supposed to produce real goods, has been modifed for and accepted by the current age to mean "automated warehouse with a couple of humans to push a couple of buttons and move a couple of forklifts around."

Cocomaan's picture

Factories have changed, and factories in cheaper countries don't look like they did 50 or even 10 years ago, but there is still an amazing amount of things made by human hands.

This article was so stupid that it made me angry. It's likely written by a Millenial (like myself) that hasn't ever stepped into a factory.

DontGive's picture

What a waste of space. Can't Amazon do some peer to peer warehousing? Store a little bit here and there amongst it's customers?

rotagen's picture

Good Riddance, I can't believe they lasted this long.  Aside from auto parts/repair businesses, I see no need for them.  They have crap inventory at crap prices.  Have you heard of this thing called the internet?

101 years and counting's picture

This is with stocks at ridiculously high levels. Dec, 09 was after the LEH crash.  How low will this go when stocks finally crumble back to reality near spx 800?

NoDebt's picture

You are young.  You may live to see that day.

TruthInSunshine's picture

"US retail as we have known it for hundreds of years is in sharp decline," warns Bloomberg Brief's Rich Yamarone...

Not that I disagree that retail & the consumer are in critical condition, and not to put too fine a point on it, but the "US" is barely "hundreds of years" old,'Mr. Yamarone.

Next, Yamarone will proclaim that Amazon margins haven't been this negative since the Boston Tea Party.

NoDebt's picture

Well, TWO hundreds, anyway.  By the time we hit the country's third centennial I have a feeling retail will be the least of our worries.

MrPalladium's picture

Counting the colonial period, the "states" have been around for about 370 years, since approximately 1640 when the mass migration of Europeans began.

MrPalladium's picture

Counting the colonial period, the "states" have been around for about 370 years, since approximately 1640 when the mass migration of Europeans began.

LFMayor's picture

Well, those East India Trading Company and Amsterdam guild members had some tight analysis going on, didn't they?

Prophetic, even!

Sudden Debt's picture

and Ebay and Amazon aren't doing so well either so there goes the E-commerce myth that it would takeover...

jay35's picture

B&M retail stores pressured politicians to start taxing online sales. It didn't actually help b&m stores, it just penalized consumers, which in turn causes them to spend a bit less overall, online or otherwise.

the6thBook's picture

They knew retail was in decline for 100's of years?  So, is that 1913? or 1813?

the6thBook's picture

They knew retail was in decline for 100's of years?  So, is that 1913? or 1813?

Dr. Engali's picture

I wasn't aware of the fact that Simon properties built the first strip mall in the late 1600s.

Winston of Oceania's picture

The footprint of main street America should look similiar to a strip mall with one on either side of the street. Difference is that the merchant no longer owned the real estate an became a middle man for the owner.

TruthInSunshine's picture

CFC (Colonies Fried Chicken) opened their first drive thru window franchise in 1764.

TrumpXVI's picture

It says, 'retail as we have known it for hundreds of years is in sharp decline'.  

Except retail "as we have known it" hasn't existed for hundreds of years.  I would date, "retail as we have known it", to have begun approximately in the second half of the nineteenth century....maybe around 1880 or so.  That would be more like one hundred and thirty-five years, give or take.

jcaz's picture

OMG dude, let it go- really?   It's just a bullet to catch reader attention-  or maybe you need a reminder that the Egyptians had malls?

TrumpXVI's picture

I think it's relevant for people to not get too sloppy about this because "retail shopping as we have known it" is very much a creation of the industrial revolution and specifically, the era of cheap fossil fuels.

The colonial settlement of North America began generating surplus wealth very quickly.  By the second half of the eighteenth century there was intensive trade up and down the eastern coast of North America (as well as over the Atlantic w/Great Britain).  It was this growing wealth and steadily increasing standard of living that contributed so much to the growing dissatisfaction with British rule.  The threat to this standard of living posed by British taxation contributed to sparking the American Revolution.  

The War of 1812 was another speed bump that had merchants (and a growing "consumer") upset on both sides of the Atlantic.  The Treaty of Ghent restored the staus qou to the point where people could once again get back to the business of business, making money, and improving their standard of living and importing/exporting consumer goods.

So, "retail shopping as we have known it", grew out of the early nineteeth century and as the industrial revolution picked up steam.  The retail environment that we would recognize today really took shape basically when I said, in the second half of the nineteeth century.  

I just think it's important for people to know a little bit of the history of how and why we live (are ABLE to live) the way we do.....because IT AIN'T PERMANENT!!!!

Totentänzerlied's picture

1880 - the dawn of the oil age

Nope, just another crazy coincidence.

Skateboarder's picture

jcaz, remember in 1984 how there's only 500 stars and the way it is now is the way it has always been?

Yeah, about these kinds of statements that attest to a static universe...

Gert_B_Frobe's picture

Well, in 1813 Slaves-R-Us was really gearing up.

LFMayor's picture

The local malls here have become The Monkey House anyways.  Bad enough that one put a "No one under 18 without adult (over 21) escort after 6:00 p.m." mandate in place between the holidays. 

Why the hell would I want to endure the shit flingers and patronize those stores?

Gert_B_Frobe's picture

I think this is code for something ... not sure. Don't want to be bossy and imply anything.

dobermangang's picture

"There's no more America! Remember when you were a kid, there'd be an America? You'd go see your Grandma, and go to her little town? There's no more little towns - it's all malls! And they're all the same! The mall in St. Louis is the same mall in Detroit.. it's got the same Gap, Banana Republic, Chess King, Sunglasses Hut, all the same crap! And every town's got two malls! They've got the white mall, and the mall white people used to go to. 'Cause they're ain't nothing in the black mall! Nothing but sneakers and baby clothes! "   - Chris Rock

Skateboarder's picture

So what you're saying is that minors after 6:00pm become enemy combatants? Shiet dawg.

LFMayor's picture

Think back to the Wizard of Oz, the scene with the flying monkeys and then mix that in with the old MTV vid of Musical Youth: Pass the Dutchie.

This is the fresh hell I speak of.

TrumpXVI's picture

Okay, So....everyone is shopping online at profitable?........yet?

TruthInSunshine's picture

No, because the polar vortex froze keyboards & tablets in much of the country for most of the year.

Paul451's picture

That would be a big, resounding "No".

Dr. Engali's picture

The kids and I hit two malls this weekend. Both of them had plenty of foot traffic, but very few people were carrying bags. The only  business' doing any volume was Starbucks and Build-A-Bear.

NoDebt's picture

Awwww... I LOVE Build-a-Bear!  It's helped me avoid divorce at least twice.

Dr. Engali's picture

Fucking place cost me a Franklin for two lousy bears w/clothes this weekend. Last year I took all three kids and it cost me $75.00.