Further reasons behind the decline of bricks and mortar retail.
- Online sales are just 8.5% of retail sales
- A consumer preference shift to smart phones
- Increasing healthcare costs.
- Changing demographics
- Too much retail
Opinion: Amazon isn’t the No. 1 villain in retail sector’s demise
Retail stocks have been annihilated recently, despite the U.S. economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter.
Jeff Bezos and Amazon.com AMZN, -0.11% get most of the blame for this, but the criticism is misplaced. Nowadays online sales represent just 8.5% of total retail sales. Amazon, at $80 billion in sales, accounts for just 1.5%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.
Things are getting more competitive in the supermarket retail space.
From Wolf Blitzer.
Albertson’s explained in an amended S-4 filing for a debt exchange offering just how tough things have gotten for traditional supermarket chains.
As is so often the case, there is a private equity angle to it. Albertson’s was acquired in a 2005 LBO by a group of PE firms led by Cerberus. In January 2015, it acquired Safeway to eliminate some competition. It then wanted to sell its shares to the public. But in October 2015, as brick-and-mortar retail began to melt down, it scrapped its IPO.
Manufacturing is likely to change for the better.
Ford CEO replaced by the company head of the mobility services division.
DEARBORN, Mich. — Ford Motor was the American automaker savvy enough to avoid bankruptcy when industry sales collapsed during the 2008 financial crisis. Then it rode economic recovery and cheap gasoline to record sales and profits. But what looks like success can turn upside down quickly in Detroit these days.
The latest evidence came Monday when Ford ousted its chief executive, Mark Fields, after only three years in the job. Mr. Fields had failed to persuade investors and his own board that the company was moving fast enough to develop the vehicles of the future, like battery-powered cars that drive themselves.
Amazon buys Whole Foods for $13.7b. The Economist explains some of the benefits and the challenges to existing retailers.
Cord cutting, competition and changing consumer preferences are taking subscribers from the cash cow behind the Disney conglomerate.
The Economist explains.