Davidowitz: Retail Sales are Doing Terrible Because Americans Don’t Have Any Money
“When we see the head of Walmart—10% of United States sales and the largest retailer on the planet earth—come out and say their profit will be down next year, it will down this year, it will continue to be down—I’m quoting him; when you see the CEO of Macy’s come out and say business is soft, Neiman Marcus say business is bad, you just go down the list…department store business is terrible.”
In Wednesday’s podcast we interviewed retail industry expert Howard Davidowitz of Davidowitz and Associates, who made the comments above, about the state of retail and the general economy.
As shown in the chart below (courtesy of the Federal Reserve), retail sales are hardly growing on year-over-year basis (as of November 2015) and have been in a general downward trend even while gas prices have declined.
Many analysts forecasted that the large decline in gas prices would provide a tailwind for consumption, which would lift US economic growth as Americans had more money to spend.
This has not been the case and Davidowitz notes that most Americans are choosing to save their money instead, being woefully underprepared for retirement, and then making most of their purchases online or at discount stores.
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