The two retail sectors that stood out during the past decade were…
Retail same-store sales posted an estimated 1.9% growth during the past 10 years.
That’s according to a review of U.S. retail highlights of the past decade by Refinitiv, which found that the 1.9% growth was slightly above the long-term average of 1.7% since it started collecting the data in 2004. The report found that the two sectors that stood during the past decade were discounters and department stores: The department stores deteriorated the most of all the retail sectors, while the discounters started outperforming towards the end of the decade.
In other highlights of the Refinitiv review:
• The amount of money consumers spent online continues to grow. E-commerce transactions accounted for 11.2% of retail sales as of Q3 2019, compared to 4.2% in early 2010.
• The mid-value group, which includes department stores, has been struggling the most in the promotional environment.
• Department stores continued to increase the amount of merchandise on sale to its highest level in 2019, suggesting that 74% of department stores’ merchandise was on sale.
• It is evident that the value proposition was key to consumers this past decade. This is evident since TJX (TJX Companies) and ROST (Ross Stores) were the “most loved” stocks, showing that shoppers love the deals there.
• The latest reading on consumer confidence shows that consumers are feeling very secure about their personal financial situation entering the new decade – which bodes well for retail sales.
“The end of the year appears to have sparked optimism about the future among consumers despite the current political economic tension and uncertainty,” reported Chris Jackson of Ipsos. “Americans’ current confidence in the economy remains unchanged; however, as we look towards the new year, we see greater optimism particularly in our own personal financial situation.
• StarMine Combined Credit Risk (CCR) model suggests there might be more store closures into the new decade – especially among department stores.