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OPINION

Shoppers on Hold…How About the Fed?

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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Retail Landscape

The great American spending machine and the universal rally cry of ‘Charge It’ has muffled since the Great Recession began, and it continues to be lackluster.

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Several trends speak to the state of the consumer, including the continued decline in department stores. John Wanamaker’s debut of the first department store in Philadelphia 1876 changed everything.

Winners in the space have come and gone from Woolworth’s to Sears and now Macy’s, which keeps tweaking itself to stay relevant.

Of course, writing off these names has been a mistake in the past as several stores such as Dillard’s and (more recently) J.C. Penney have climbed back from the brink.

Electronics have stalled, but furniture is beginning to come on strong along with the rebound in the housing market. Then, there’s the non-store retailer that is finally living up to the hype and then some.

  • Share of overall retail in 2001: 2.2%
  • Share of overall retail in February 2016: 10.7%

I suspect there will be a happy median where department stores and online retailing can both thrive.

Department stores have a supporting role as distribution centers (home base for the fleet of delivery drones) and a place for luddites like me to shop.

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The other indisputable trend is eating away from the home. Last year, the amount we spent on eating out surpassed what we spend at the grocery store and it continues, as it continues to surge. Last month, spending at food and drinking spots climbed 1% from January to $53.7 billion while grocery stores sales declined 0.3% to $50.9 billion.

This is the backdrop as the Fed decides if this economy is so hot that it must cool down. The answer is an emphatic no, but you have to hope it changes soon to an emphatic yes, because these doldrums are economic killers and are hard to escape.


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