For the most part, since the beginning of the year economic data reports have missed expectations and indicate that the economy is beginning to slow down or contract. It is also pretty clear that the "bad weather" narrative being promoted to explain the economic weakness is not valid. What is clear is that the economic weakness is being driven by a dramatic slowdown in spending by the consumer in all areas, including retail, autos and housing.
The first sign that the economy is getting weaker is reflected by poor retail sales reports and store closings. For instance, Radio Shack (RSH) reported its Q4 sales Tuesday (Mar 4) which showed a 20% decline in sales and 19% drop in same store sales. It's going to close 1,100 stores instead of the 500 that was originally reported in late 2013. Furthermore, several other major retailers like Target (TGT), Macy's (M)
By George Leong, B.Comm.
We all know how bad this winter has been so far. The harsh weather across the majority of the country has impacted jobs growth, commerce, housing, and consumer spending. Of course, with the spring season on the horizon, we'll soon see if the weak economic metrics mentioned were really an aberration due to the weather-or a sign of further slowing to come.
From what I can tell right now, we are definitely seeing some growth issues in the retail sector that have been attributed to the winter weather. The Home Depot, Inc. (NYSE:HD) reported a somewhat flat quarter, as did Lowe's Companies, Inc. (NYSE:LOW). However, I understand why they've reported flat numbers- it's winter; who wants to renovate or build when it's so cold outside?
Bellwether Wal-Mart Stores, Inc. (NYSE:WMT) is also struggling to attract consumers to its doors. The global retailer delivered flat sales