"Retailers Are Running Out Of Time": Channel Checks Show 13% Collapse In Traffic

Tyler Durden's picture

While the market is treading water, with the S&P modestly in the red, offset by some strength in the DJIA, retail stocks are broadly lower, with 83 of 91 components of the S&P 1500 Retail Index trading in the red, led by Tuesday Morning, Caleres, Express, Shoe Carnival, Francescas as BBG notes.

Some observations: according to Wells Fargo's Ike Boruchow, it’s “increasingly clear that retail is under significant pressure" adding that store traffic remains weak (likely to get softer this week due to Easter shift), while markdown rates are not only elevated on an annual basis, but also getting sequentially worse. He concludes that "retailers are running out of time” to reach elevated Q1 numbers as consumption is failing to rebound.

In a separate note, Cowen's retail team conducted channel checks and found that March week 3 traffic declined 13.3% vs -2.4% y/y, “slightly worse” than Cowen’s estimate down 11%-13%, vs last week’s -10.6%, citing national traffic devices.

And then there were various overnight news, among which:

  • Movado reported 4Q sales that missed estimates and issued forecast for year EPS and sales that also trailed
  • Caleres cut to nuetral vs positive at Susquehanna (PT to $31 from $40); cites disappointing 4Q results, forecast
  • Target announed plans to open 43k square-foot small-format store in NYC’s Herald Square
    • Macy’s, whose flagship store is also located in Herald Square, is down as much as 2.7%, to lowest intraday since Feb. 1
    • For Macy’s, TGT’s entry could put some pressure on apparel business given TGT’s strength in signature categories, Bloomberg Intelligence analyst Poonam Goyal says in email
    • She adds that Macy’s challenges “are far beyond TGT’s entry,” traffic at other non-flagship locations must turn, which appears “a difficult task given move to online”
  • EBay Plans to Guarantee 3-Day Delivery for 20m Eligible Items
  • Consumer sell ideas include AEO, BBBY, DDS, GCI, GIII: MKM managing director and chief market technician Jonathan Krinsky
  • Amazon’s Clothing Success Could Doom Department Stores and Malls: Fox Business
  • House Ways and Means Committee Chairman Kevin Brady hopes a tax reform bill will be ready for markup this spring: Bloomberg
  • Fly reported M Science issued Street-high 1Q rev. forecast for Wayfair (up as much as 1.9%)

In short, whether due to displacement (from online vendors), due to concerns about border tax, or simply because the US consumer's plight - despite the recent surge in Trump=induced animal spirits - has not changed one bit, the pain for US retailers continues, and as a result, the outlook for malls and other retail-associated secondary industries will remain bleak for the foreseeable future.

Finally, a quick look at "the next (original) big short", i.e., CMBX, shows that recent negative trends are accelerating to the downside.

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abyssinian's picture

Looks like more bullish news, time to buy more stocks....

Logan 5's picture
Logan 5 (not verified) abyssinian Mar 20, 2017 1:52 PM

U mean UNDERWATER OUTFITTERS ain't sellin' pink shit to teens?

GUS100CORRINA's picture

The UN is NOT a reliable and trustworthy news source.

In fact, the UN is corrupt to the core and probably beginning to build the narrative for the next crisis in the minds of the PUBLIC.

Research AGENDA 2030 and you will understand!!!!!

We should dismantle the UN!!!!

xythras's picture
xythras (not verified) GUS100CORRINA Mar 20, 2017 2:38 PM

Some of those 3rd world sons of bitches might disagree with you.

S America is hit pretty hard these days.

This Region of The World is Being Hit By the Worst Economic Collapse it Has Ever Experienced

http://dailywesterner.com/news/2017-03-07/this-region-of-the-world-is-be...

 

Nevertheless UN should be disbanded

GUS100CORRINA's picture

Question: Are you familiar with the FABIAN Window?

If you are familiar with it, that picture in the window tells the story of how a CRISIS is created and used to move an agenda.

It is my understanding that 3rd world countries are a big part of the agenda as the world moves towards the New World Order. BLOCKCHAIN technology and removal of cash will be one of the key enablers during the transition which leads to poverty.

mkhs's picture

Both of you are idiots.  The UN should be nuked, from space.  It is the only way to be sure.

Handful of Dust's picture

8 years of Obamanomics ... I'm surprsed any stroes are still open.

KimAsa's picture

Two more Michael Snyder articles from Economic Collpase blog and End of the American Dream blog. Why not just post the links to these blogs directly?

Publicus's picture

All the liberals are losing their jobs.

swampmanlives's picture

So you like high unemployment levels?

Publicus's picture

I love high liberal unemployement level! We are going to crush the gibs too!

GUS100CORRINA's picture

Shadowstats data would seem to confirm the RETAIL SLUMP/CRASH.

By the way, shadowstats publishes honest data that is at odds with virtually every PROGRESSIVE LIBERAL government statistic ever published. PROGRESSIVE LIBERAL DEMOCRATS are LIARS extraordinaire!

=== Shadowstats Latest News ===

Posted March 15th, 2017 at 2:42 PM (CST)

The latest from John Williams’ www.shadowstats.com

– FOMC Fiddles with Boosting Interest Rates, While Annual Real M3 Growth Just Plunged to a New Signal for a Major Economic Downturn

- Annual Contraction in First-Quarter Real Earnings Is a Virtual Certainty; Back-to-Back Quarterly Contractions Also Are in Play; Circumstances Not Seen Since the Stalled GDP of Second-Half 2012

- February Nominal Retail Sales Gain of 0.08% Was Less than Inflation; 

Inflation-Adjusted Real Sales Declined by 0.04% (-0.04%) for the Month

- Headline Annual Inflation Surge Has Been Due to Energy-Price Distortions, Not to an Overheating Economy

- February 2017 Monthly CPI Inflation Rose by 0.12%, Pushing Annual CPI-U Inflation to a 60-Month High of 2.74%, with CPI-W at 2.82% and ShadowStats at 10.5%

- February Final-Demand PPI Annual Inflation Hit a 59-Month High of 2.19%

“No. 872: February PPI, CPI, Retail Sales and Earnings and the FOMC”

Erek's picture

"...increasingly clear that retail is under significant pressure..."

No shit! How many times does it need to be repeated, that there isn't any money left to buy crap nobody needs?

aliens is here's picture

Buy more SNAP shares. All is good.

wisehiney's picture

Sit tight and be right.

Get paid to wait.

Oldwood's picture

The smart people will always tell us to remain calm and safely in our seats....As they quietly work their way towards the exits.

We know that the only ones winning in this game sell high and buy low and that means they must time the cycles. Those claiming gains from remaining in their seats are few.

HillaryOdor's picture

Bro anyone can become a millionaire if they just buy and hold.  On the other hand when a loaf of bread becomes $100, it might not seem like such a great investment.

ZD1's picture

Target announced plans to open 43k square-foot small-format store in NYC’s Herald Square.

No doubt with a big tranny restroom? 


aliens is here's picture

All tranny all the time.

William Finn's picture

Sales at Party City should increase markedly with the news of Mr. Rockefeller's passing.

NoDebt's picture

Someday I'll have to explain to my grandchildren what a 'mall' is.

 

Wang Dang SP's picture

And give them silver dollars for presents. 

The Shadow Broker's picture

Giving a valuable asset like silver as a present to someone who is uneducated accomplishes little.  

Consuelo's picture

 

 

With particular emphasis on the 'Food Court'...

pismobird's picture

princess phone

lime rickey

stick shift

Mighty Mouse

Christmas

trapper keepers

Blockbuster

Caldors / Bradlees / E J Korvettes / G. Fox / Gimbal's / Chess King

Spencers Gifts / McCorey / Jordan Marsh / Edw. Malley Co. / 

Stratford Town Fair / J M Fields / Pantry Pride / Zayre / Ames

15 cent Hamburgers

floppy disk

Theatres at Mall of America

 

 

 

Beatscape's picture

I think the Tylers are FINALLY right.  I put on a few short positions earlier today.  One of the biggest issues driving the market higher since the Trump victory is the anticipation of major tax reform.  Now, much (most?) of that is already in the market. Further, two issues are complicating it.  One, the Republicans can't seem to work together and the risks of passing tax reform are becoming higher as they argue more among themselves.  Secondly, it's looking more and more that this legislation will be pushed to 2018.  The longer it is pushed out, the more risky it becomes by definition.

besnook's picture

amzn is not getting all those sales. even internet retail is collapsing, restaurants are collapsing, cars and real estate are collapsing. the stock market is next.

SilverRoofer's picture

Most money goes to health care these day's doesn't leave much left over to go Shopping for other shit besides food

sparkplug's picture

Health care, credit cards, and rent. Meanwhile, nobody has any real money in the bank and the average wage is about $10 an hour. What a wild time to be alive, eh?

SilverRoofer's picture

Indeed especially if you have no degree all jobs available you compete with the Brown invasion force from the south and your lucky if it's 10$ an hour

shizzledizzle's picture

Yellen with the 1:45 knife catch. That's got to be expensive to turn around a selloff like that. I know expensive is relative when you balance sheet is endless but still....

neutrino3's picture

ND, WD ... both ... cynical ... err ... physical.

Consuelo's picture

 

 

'Shoe Carnival'...?

 

Yep.

 

 

 

dobermangang's picture

My bakery outlet is now only open 5 days a week instead of 7.  Things are really, really bad out there.

Sledge-hammer's picture
Sledge-hammer (not verified) Mar 20, 2017 2:08 PM

The last time I bought anything other than food or gas was in October 2016 (just before the election) when I purchased on-line a bunch of firearms and ammo.  Actually, I did buy a pair of jeans on-line from a company that makes its clothing in Ohio.  I usually go to a store and buy Levi's but one day I looked at the manufacturer label on my Levis and saw that my Levi's were made in Lesotho (Africa).  I researched Levi's, and they no longer produce in the USA.  I decided that I would no longer go to the stores to buy clothing and will only buy if it is made in the USA.  I am trying to do the same with everything else, thus I am one person who is no longer shopping in stores.  That is why I am not shopping.  Plus, like many people, I do not have a great deal of disposable income to buy things "frivolously".  I imagine that I am not too dissimilar to lots of my fellow Americans.

south40_dreams's picture

Shopping isn't what it used to be. Empty parking lots everywhere

Bwana's picture

I think people fail to realize how serious the problem or economics have become. First of all Obama's policies helped to have the store closures in 2008 and 2009 more severe. I live in Southern California and there are Ghost Malls that have been vacant since 2009. Now the remaining malls are failing. This isn't the first go around for retail stores it is the second.

rejected's picture

Not to worry,,, It's Mid March. The blood suckers getting 5 grand tax giveaways for the cute little kiddies will be out shopping with OPM soon.

Stan Smith's picture

I live near an area that has a very, very large shopping complex.    Strip malls on steroids.    The usual suspects are there (Lowes, Target, Wal-Mart, etc) as are many smaller retailers.    It's also spread out over multiple "sections" and from what I know about it, the area is the 2nd largest generator of sales tax revenue in the county I live in (the 1st is another strip mall area on steroids, in a more affluent section of the county).  The number of empty parking spaces for all of these places is insane.    My guess is, other than Christmas shopping 'season',  you can park wherever the hell you want.    Even the anchor stores mentioned above are rarely packed during their peak hours on weekends.  

I dont know how this can keep up.

motorollin's picture

I see the same thing in the Portland metro area in both the mainstream strip mall (Target, Bed Bath Beyond, Best Buy, Barnes & Noble, Office Depot) and the higher end parts of town with botique shops and expensive restaurants.

 

Christmas season showed some signs of life, but other than that, it's pretty dead. The busiest places I see are fast food joints like Chick-Fil-A, Five Guys and even McD's. Grocery stores also have some decent traffic, but I wouldn't count that as discretionary.

StreetObserver's picture

Where is this happening Stan?

Stan Smith's picture

St. Louis County.    Although my guess is you could place this situation in most mid-sized cities and counties and come up with comparable situations.    The vacant commercial space nationwide seems to be saying that anyway.

Ben A Drill's picture

Ever try shopping at Costco on the weekends Stan?

Stan Smith's picture

I avoid Costco on weekends at all costs. :)   During the week it's not as crazy.

Ben A Drill's picture

I work retail. Last thing I want to do on my day off is go to a store and shop. I order online, let the wife drive, find parking space, spend. LA county is full of a bunch of animals.

gregga777's picture

Something is wrong because this doesn't make any sense.  There are ~96,000,000 independently wealthy, unemployed working aged Americans with lots of money and abundant free time for shopping in malls and department stores.  There are also ~45,000,000 indepedently wealthy Americans receiving food stamps giving them plenty of extra cash for shopping in malls and department stores.  So, what's the problem?  Why aren't these Americans using their abundant wealth and free time to shop 'til they drop?  

It couldn't be because these people are actually poor, could it?  The Goldman Sachs Feral Reserve System, the CONporate Mainstream FAKE NEWS Media and the United States of America's Feral Gangster Government's Department of Lying Bureau of Lying Statistics all claim that the TRUE unemployment rate is only 5%.  So, they could not be lying, now could they about the TRUE state of the American People and their ability to spend money?  /extremely sarcastic

 

barysenter's picture

The road to serfdom steepens. Next stop: China.