Rickety Retail

The latest teeth gnashing about poor retail sales is misplaced. Retail sales weakness is due to less spending by foreigners due to the strong dollar, more online spending and more service spending. Over the last decade, spending on clothes/shoes grew just 1%/year while spending on cable/TV/radio services rose 5.1%/year. Similarly, Y-o-Y sales at clothing and accessory stores rose 1.3%; online sales rose 2.1%. Large department stores are no longer economic bellwethers.