While President-elect Donald Trump promises to increase US economic growth, the DJIA reaches new record high and the majority of macroeconomic indicators are positive, the retail sector may have delivered data that could spoil the party. Indeed, sales of Macy’s (M) fell by 2.1% in November and December 2016, sending the share down around 9% after market close.
Besides Macy’s, it is in fact the large US retail department stores sector as a whole that multiplies news report. Before Macy’s announced the closure of approximately 100 stores and the dismissal of approximately 10,000 employees, Sears (SHLD) confirmed the closure of 26 eponymous stores and 78 Kmart stores. Simultaneously, Kohl’s (KSS) also reduced its profit forecasts for the full year 2016. “Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December,” explained Kevin Mansell, Kohl’s CEO.
While the development of e-commerce does participate in the sector’s difficulties, the closure of department stores that opened more than thirty years ago, such as the Macy’s in Battle Creek, Michigan (USA), may indicate a more pronounced stagnation of household consumption in some suburban areas.