How to Survive the Retail Apocalypse

Hate Christmas shopping? Here’s the best way to get out of it…

Tell your wife we’re entering retail hell. Buildings are crumbling. Shelves are bare. Not a soul can be seen in the neighborhood strip mall. It’s just no place for a lady.

It’s true.

Even the King of Lower Prices, Almighty Walmart has lost his grip on the shopping masses…

“Earlier this year, the stock market value of Amazon.com surpassed that of Walmart, a turn of events that many saw as indicative of how badly brick-and-mortar big box retailers have lagged behind in building up their e-commerce,” Fortune reports.

“Walmart is now hustling to bridge the gap, pouring billions into its tech to claw back some market share. Target, also a laggard, is similarly spending as much on tech as on its 1,800 stores. Both those companies, though, generate digital sales that are still only a small percentage of total sales, and a fraction of Amazon’s.”

And all this might be too little, too late. If stock prices are any indication, it’s going to be a cold, dark winter for the big retail chains.

This earnings season has been a disaster for retail. Earlier this month we noted a nice beat from American Eagle Outfitters. That tidbit suggested that specialty retailers and boutiques are shaking off the Amazon Curse. But even these stocks are getting dragged straight to hell with the likes of Walmart and J.C. Penney.

The list of failures is getting longer by the day. Macy’s? Cooked – down 42% over the past six months. Nordstrom? Down 20% over the same timeframe. Dick’s Sporting Goods? Awful earnings sent this athletic retailer lower more than 10% yesterday alone. There’s absolutely no way to sugarcoat it—the retail sector is crashing.

But Amazon is just a few ticks away from all-time highs.

Is this retail mismatch a sign that the tipping point for traditional malls and shops has finally arrived?

Amazon

Amazon has nearly doubled in 2015, while the S&P 500 has gone nowhere. And brick and mortar retailers are dying by the score…

Traditional retailers can’t even get their online sales anywhere close to Amazon’s. Bloomberg reports that efforts by big-box retailers to attract online sales isn’t even generating new revenue. It’s simply cannibalizing off their own in-store sales.

Here’s the result:

Online Sales

Does this morbid picture mean its lights out for every storefront, big box, and boutique? I doubt it. Niche retailers and smaller shops should be able to compete with Amazon in the long-run. But that doesn’t change the fact that these stocks are poison right now. Avoid ‘em like the plague unless you take pleasure from burning cash.

There’s just nowhere to run from the Amazon juggernaut.

Sincerely,

Greg Guenthner
for The Daily Reckoning

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