What’s Going On With US Consumers: Store Traffic Plunges 8% Into July 4th Weekend
This article comes from ZeroHedge.com
First it was auto the auto parts suppliers getting hammered after O’Reilly Auto announced unexpectedly poor results (duly blamed on “mild weather” and weaker than expected Hispanic spending) and tumbling the most in 5 years, and then it was the retail REITs turn, after channel checks at Prodco Retail Traffic Analytics revealed that the US consumer continued to hibernate into the July 4th weekend with North American store traffic 8.1% lower in the week leading up to the July 4 holiday weekend, a steeper drop than the year-to-date trend of down “only” 6.6%. In the week ending July 1, with footfall at luxury retailers down 9.7%, and 8.3% weaker at apparel stores, Bloomberg reported.
The justifications for the abysmal results were legion: retail 2Q sales results may be impaired by weak traffic, as consumers still prefer digital, and they swap shopping for travel, dining out, or outdoor recreation. Shopping less in-store continues to hurt retailers’ ability to prompt unplanned purchases.
The companies impacted the most included retailers such as Abercrombie & Fitch, Macy’s, J.C. Penney, Tailored Brands and Nordstrom reported declines in traffic and same-store sales. And since they’re among the tenants of REITs Kimco and General Growth, the the S&P 1500 retail REITs index fell as much as 2.8%, the most intraday in two months, with all 24 members declining: KIM is the worst performer, down as much as 5.6%; while other laggards include PEI, CDR, WRI, CBL, GGP, KRG, SKT, SPG, and MAC