Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


Collect this extra money immediately!

Collect this extra money immediately!This unique income-boosting opportunity allows you to collect up to $1,003 a month in extra government cash. This plan is available to everyone over the age of 18. And because of the way the government views the money that comes from it, your current—or future—Social Security benefits won’t be affected. There’s still time to get your name on the next check run. I’ll show you how here.


A Tale of Two Retailers

By Linda McDonough on October 4, 2016

Traditional retailers are in a house of pain. The Sports Authority, PacSun and Aeropostale all filed for bankruptcy this year. Retail darlings Macy’s, Target and Kohl’s all reported declining second quarter sales and lowered estimates for the current quarter.

But the Conference Board reported ebullient consumer confidence numbers last week. The survey, which measures consumers’ outlook on the job market, business conditions and their own personal income, rose to a post-recession high.

Plus employment numbers continue to be robust and seem to be the one consistently strong data point holding the Fed to a possible rate increase later this year.

On the other hand, the government’s annual retail sales for August drooped. This much anticipated data point dropped slightly from July.  Consumer purchases, which make up 70% of the U.S. economy, are now on track for a 2.4% increase, slightly less than the July estimate.

So confidence and employment are doing well, but sales aren’t. What gives?

Beneath the government’s headline retail sales number is a tale of two retailers. Department stores and electronics stores are the worst performers and non-store retailers and personal care stores the best.  Much can be gleaned by analyzing these breakdowns.

Sales to non-store retailers, Amazon being the most famous, were up 11% in August. Sales to health and personal care stores rose an impressive 8%, and food services and drinking places (a diplomatic term for bars) enjoyed a 6% increase.

The worst performing categories were gas stations, which suffered a 10% drop due to lower gas prices, department stores which saw a 4.5% drop and electronics stores whose sales dropped 3%.

The Internet, which has turned many a business model upside down is the likely culprit.

With customers able to compare prices online for everything from appliances to clothing, retailers have resorted to matching a competitor’s price. Note two of the weakest categories in retail sales are department stores and electronics stores, retailers whose profit margins are being googled to death.

Lower production costs from global outsourcing have allowed many apparel and electronics manufacturers to lower prices. Yet these lower prices do little to stimulate demand. This leaves them selling the same number of units at a lower price, a calculation that sadly leaves them with declining sales.

The Internet has lowered a huge barrier to entry for many manufacturers. The cost of opening a brick and mortar retail store is no longer necessary for selling goods. Although consumers may be spending more overall on goods, those dollars are dispersed over a wide array of manufacturers.

Call it the democratization of retailing. Sites like Etsy, Zappos and Boden are able to reach any consumer who wishes to part with their cash. Instead of slogging out at the mall, with crowded parking lots and racks full of undesirable merchandise, consumers can click and order from the comfort of their couch and enjoy free shipping to boot.

I personally love an industry with clear winners and losers, and I’ve been spending a huge amount of energy researching both and plan to buy the winners and recommend puts for the losers. Keep track of my calls in Profit Catalyst Alert and Growth Stock Strategist.


You might also enjoy…


Boost Your Annual Income By As Much As $12,036

We’ve uncovered a unique income-boosting opportunity that allows you to collect up to $1,003 a month in extra government cash. 

This plan is available to everyone over the age of 18.

The amount you make isn’t dependent upon your marital status…

How much money you currently make…

Or even how much money you made in the past.

Best of all, because of the way Uncle Sam views the money that comes from this plan, your current—or future—Social Security benefits won’t be affected, either. 

There’s still time to get your name on the list for the next check run. 

I’ll show you how here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.