Resurgent Retail?

Recent headlines in retail have shifted the narrative from retail is dead to retail is strong and alive. Some headlines over the last few weeks included:

  • Walmart posts the best store comp in 10 years
  • Target posts the best comp in 13 years
  • Macy's return to a positive store comp and increases annual guidance

While this is all great news for retail, be reminded that high tides lift all boats. Wages are growing at the fastest rate in 9 years and unemployment remains below 4%. The stock market continues to rally in the longest recorded bull market in history. Restaurants continue to see strong sales year over year and even amusement parks are posting their best months. Consumers are spending everywhere and providing much needed relief.

Bottom line: This is shaping up to be a rosy holiday period for retail. With that said, positive sales hide a lot of sins. Enjoy the party now, but the long term trends of shifting to online in an "overstored" environment will still be here when the champagne runs out.