Finally, someone other than me is talking sense about retail. In this case it’s Vitaliy Katsenelson:
Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5 percent of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5 percent of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales.
Read the whole thing. The developments he includes in addition to online include
- Changes in consumption needs and preferences
- Phlegmatic growth in personal income
- Health care costs
- Too much retail capacity
to which I would add higher taxes, the dominance of retail conglomerates cobbled together via borrowing, and bad management.
I would put most of the blame on personal income levels.
That and houses filled with crap. I know my spending went down when I stopped having places to put things.
Gustopher,
No need to stop until you star in an episode of hoarders.
I agree that personal income levels are likely the major cause. I certainly haven’t seen the consumerist culture change much.
The first bullet point has been written about frequently. Life cycle issues. Spending is graduating into saving.
Health care AND education.
Excess retail capacity doesn’t reduce retail spending. It manifests as low capacity utilization: sales per sq ft.
Yeah, I didn’t get that one, either.