Don’t count out retailers yet: stronger April than previously thought
April and March were stronger months for U.S. retailers than previously thought. In April, retail sales increased by 0.4%, and were 4.5% higher than the previous year, while a 0.2% monthly decrease in March has been revised upwards, to a 0.1% increase. This bodes well for the U.S. economy, as rising sales in the first quarter of 2017 may help boost the country’s GDP, which was seen to be growing at 0.7% in the government’s first estimate.
Despite the positivity boost, previously established trends have continued to assert themselves over the last two months, with online sales outperforming brick and mortar retailers. The latter, including big names like Macy’s and Sears, have struggled to encourage footfall into their stores, and sales at department stores have, consequently, fallen by 5.2%. Meanwhile, online retail sales were 10.7% higher than the same period a year ago, and up by 1.4% during April alone.
This news comes as ecommerce giant Amazon seeks to push into furniture sales – a category that was down 0.5% during the period. Amazon is hoping that it can transform an area of retail that is lagging in the online world. Unlike books, apparel and electronics, there are still a number of open questions over how to sell furniture online. These questions concern even the most basic concepts, like how much variety to offer on a website.
If anyone can crack this emerging market, it is undoubtedly Amazon, the company that transformed Ecommerce in the U.S. and elsewhere during the mid-90s. According to Veenu Taneja, furniture general manager at Amazon, the company is already making headway. He said: “furniture is one of the fastest-growing retail categories here at Amazon.”
The views expressed above are those of the author, and should not be construed as representative of Dominion Fund Management Ltd. All information was correct at time of writing. In the case of forward looking statements, these should not be construed as facts. Additionally, Dominion holds Amazon in its Global Trends Ecommerce Fund.
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