No one is buying clothes anymore — here’s what they’re spending money on instead
We all heard about the poor earnings throughout last month from retailers and bank to name a few. While an economy that is stuck in slow growth (at best) definitely contributes I was curious to find out where the money was being spent. We know Americans are not saving huge amount so there needed to be a couple sectors where people were spending their money. Below is a report on the top earnings growth rates in Q1 2016.
The couple areas that stand out to me include the top performer MarineMax which is a boat retailer, casinos, and general home building companies. People are spending their money on big ticket items and int he case of boats, cars and casinos all depreciating assets.
Click here to visit the original posting site.
…
Retail stocks have been getting hammered this week following disappointing quarterly sales numbers from a handful of stores, including Macy’s, Gap, Kohl’s, Nordstrom, and Target.
Executives from nearly every company blamed a spending pullback in one common category for the declines: apparel.
So if consumers aren’t spending on clothes anymore, what are they buying?
People are instead buying big-ticket items, like cars, boats, and swimming pools, as well as building new homes and furnishing them, according to an analysis by Jharonne Martis, director of consumer research for Thomson Reuters.
Consumers are also spending on hotel stays and travel, she found.
To determine where people are diverting their spending money, Martis analyzed Commerce Department data and identified the highest retail performers in terms of earnings growth rates.
“When looking at the winners in terms of earnings, it’s clear there is a nesting theme,” Martis wrote.
Here are the top earnings growth rates, according to Martis’ research. (The first company listed, MarineMax, is a recreational-boat retailer).
Andrew, Its economic collapse. Its the last thing people can do to get all bubbly about spending money and impressing their friends they don’t like.
Use the banks money and high leverage. The Repo Man is on stand by !!!
Archdeacon, and then there are the “H&M’s” who make well designed clothes for next to nothing and sell them for not much more. They had a revenue of 150 billion in 2013. There are too many of these places now exploiting slaves for 35 cents an hour….race to the bottom.
having said that H&M are vowing to raise the “slave-wage” higher to a “living wage” by 2020 in places like Cambodia Vietnam etc. So any growth from that will be domestic consumption over there not in the west. Technically cheap credit, cheap clothes and other Asian slave-produced goods bought in the West temporarily puts a lid on inflation and social unrest/disillusionment. I’m not sure how long this shell game will last?
Look at the vendors list. Its all with cheap financing and bank loans. Very little money down and the rest in payments. In many cases 100% financing. LOL Sound economic health !!!
Leverage/debt and the bubble is gargantuan now. All prophetic.
+1
The emperor is wearing no clothes…….. But he is staying in a nice hotel with a casino in the lobby……..
Ditto to Trader and Ex – all living beyond their means assuming it’s the new norm.
ditto – Jerry.. always long gold. Loyal and of high integrity.
Unfortunately our leaders are complete opposite…..
The majority of them are despicable vermin lying scum.
Yes Archdeacon (!) Andrew – people often find ways and personal motivations to live beyond their means…..
Their mantra is (YOLO) – “You Only Live Once” and they neglect tomorrow to play today. It reminds me of the story of the Ants and the Grasshopper. Ants think and plan for Winter All Summer long, and the Grasshopper just played all Summer; but when Winter came……..
But the millenials,X generation somehow always can scrape up a few quid to pay their monthly cell phone bill……………
+1
“nesting theme” Interesting term. Several of these like HZO, SUP, POOL, ETH and KBH are all supported by buyers using debt. Just sayin’. The recreation vehicle industry seems to locally be doing great. $150,000 rigs to motor down the highway, buy a parking place, spend more on storage 10-11 months of the year and watch your value depreciate tremendously. Wow, what an expensive vacation in my book. Fencing new homes is another booming sideline business in this area. Wood is out, plastic is in. Prices run about $25-30 bucks a foot installed.
A few do their own installations but most people can’t do anything themselves so all service industries are doing well. Much is covered by small contractors.
Earning growth rates sound good but a couple I looked at (IBP ad BYD) have PE’s of 32 and 47 respectively. Not exciting to me but look at what Amazon has done to that old metric! Maybe I’m the one who should be looking at different models.
It maybe just be where I live but if you will talk to my CPA he will tell you that Obama care and the penalties has hit people hard this year. They are ahead to next year and can hardly pay for what they have now.
Good point doug. Many people I know are struggling due to the continued increases in health care costs, so saving a little at the gas pumps has been a drop in the bucket compared to what the average family is dealing with.
In addition to rising medical cost, food prices also continue to rise. Even though the gas prices are lower in the US, which should translate to lower shipping costs, and the Dollar has been relatively strong the last year, somehow food continues to cost more and more.
Personally, I go shopping for new clothes only when I’m to pudgy to fit into the old ones. 😉
Amazing. And health care was already a huge financial burden before Obama came along and ‘fixed’ it. It’s one more reason I’m happy enough to reside outside the US–ex-pats aren’t forced to participate in O-care.
Agreed GH. We’ve considered more and more doing the same thing and over the last few years. Cheers!
That’s right.
Good thought but if health insurance puts them over the top, maybe their previous debt purchases have had something to do with it also.
Absolutely Silverdollar. As discussed further up above, people have an uncanny ability to find ways to live beyond their means. As a result, many families are still underwater, but my point was that savings at the pump didn’t allow for frivolous spend on clothes, because the increasing healthcare has most people in the hurt locker.
I should have proof read it should be they are looking ahead to next year. It is all over the news that many people have less than a 1000 dollars in the bank. It is not that great where I live.
Yes, I’ve seen this also. Another stat in a Atlantic article showed where 47% of households were in trouble if they were hit with an unexpected $400 surprise expense. Unbelievable.
Anyone who willingly and voluntarily pays for that extortionist Obama Care. I have zero tears for.
Everyone has a choice and everyone makes that choice. If a person voluntarily chooses to remain in and participate in a well known fraud racket which is clearly not medical insurance then they have volunteered to be extorted.
If you will not withdraw your consent from an unconstitutional fraud you have willingly made a choice.
No tears!
I guess I don’t know how it works since I haven’t been around for it. Don’t they force anyone with income above a certain amount to participate?
Zero debt, standing pat on PM/s. According to a news article yesterday, 2/3rds of U.S. households would have difficulty raising 1 K for an unanticipated emergency………….
People are buying their clothes at thrift stores. Great deals! Ok with clothes worn by others because you can wash them first. Not ok with food prepared by others, esp. punks spitting in McFrappe drinks.
Sad commentary, no? Personally I never use fast-food outlets, fwiw.
Super Size Me – Trailer
French Fry and Soda Sizes
On a more serious note, anyone investing in oil, gas, transportation, utilities and a number of other industries for the long term ought to view the following talk. This actually blew my mind how fast disruptive technologies are developing. This is better than all the education I ever paid for. Do yourself a big favor and watch this. It will make you question much of what we see and hear on this program: https://www.youtube.com/watch?v=Kxryv2XrnqM&feature=youtu.be
Very interesting post Silverdollar. I don’t know if I agree with his timeline, but I agree with the general premise for the longer term. Thanks!
Here is the description of that video presentation for those interested in the Energy Space:
__________________________________________________________________________
Tony Seba’s Clean Disruption Keynote presentation at the Swedbank Nordic Energy Summit in Oslo, Norway, March 17th, 2016.
The keynote, based on the book ‘Clean Disruption of Energy and Transportation’ assert that four technology categories will disrupt energy and transportation by:
1- Batteries / Energy Storage
2- Electric Vehicles
3- Self-Driving Vehicles
4- Solar Energy
The outcome of the Clean Disruption is that by 2030
• All new vehicles will be electric.
• All new vehicles will be autonomous (self-driving).
• Oil will be obsolete
• Coal, natural gas and nuclear will be obsolete
• 80+ per cent of parking spaces will be obsolete.
• Individual car ownership will be obsolete.
• All new energy will be provided by solar (and wind)
Clean Disruption is a technology disruption. Just like digital cameras disrupted film and the web disrupted publishing, Clean Disruption is inevitable and it will be swift.
________________________________________________________________________
Personally, I’m invested in many sectors like Oil, Nat Gas, Nuclear, Renewable energy, Lithium & Batteries, etc… While I share the enthusiasm for an ever-changing energy mix and new technologies, it seems that Tony Serba is a little overly optimistic for that much change to happen in just 14 years. However, I keep the door open for all possibilities, because sometimes change happens faster than we realize. It just doesn’t seem quite probable that quickly, but in 30 years. Sure.
The odds are it will be about 20-30 more years before hydrocarbons are phased out in a major way (there’s still a lot of money in that sector that isn’t going to role over gracefully.) It should be noted that even Oil companies are now investing in renewable energy sources, so it is starting to pick up some steam).
Nuclear energy will implement new technologies to stay relevant (like beryllium coated pellets and new reactor designs), barring any more unforeseen major events. Most of the reactors that just got built, are under construction, or are planned have 30-40 year lifespans; so I can’t see the governments of the world abandoning them and walking away from the billions of dollars spent in just 14 years.
As for Fusion reactors, they still seem a ways off from being utilized, but who knows? Then lastly, there are many ideas on “free energy” that have circulated for decades that may start taking root, and make solar, wind, geothermal, hyrdro electric, and batteries obsolete. Energy is a dynamic and ever-changing marketplace.
I do understand the points Tony is making about the S-Curve for adoption, now things don’t happen linearly, but the infrastructure for charging stations and Solar has a lot of work to do to displace all the gas stations, power stations, and industrial power needs. Again, I totally agree with this premise, and that it will happen faster than many of the die-hard Oil/Nat Gas/Coal guys realize or can admit to themselves. However, as mentioned it will displace parking, mechanics, the Oil & Gas industry, oil change places, etc…. and the economic impacts of that will slow this process down and cause quite a heated public debate before people are willing to accept that the cheese has moved.
As for the concept of Lithium battery power for the electric devices, electric vehicles, commercial vehicles, farm vehicles, home backup, business backup, and industrial backup….. Its already happening and I’ve been writing about it on this blog for the last 3 years fairly vocally and covering the real Lithium miners that are not just marketing fluff, but have an honest chance at being players in the space like Orocobre, Lithium Americas Corp, Galaxy Resources, Neometals Ltd, General Mining, Nemaska Lithium, Pure Energy Minerals, Lithium X, Dajin Resources, Bacanora Minerals, and Critical Elements Corp. It’s a shame so many have been damaged by past commodity bubbles in Rare Earths, Graphite, and even previously in Lithium, that they don’t realize the rules of the energy game have changed since 2011- in a major way.
Thanks again for posting that video up above Silverdollar. I showed it to my lady and we had a spirited 2 hour conversation about the concepts and implications on the future (that has just arrived……).
Cheers!
Thats a great video presentation. Made me drop my longer term plans to rotate into Uranium miners after Gold miners top out.
I would not rule Uranium miners out at this point based on one guy’s assessment of how quickly these “clean disruptive” power sources will take hold. As mentioned above there are about 60 reactors under construction and number that just got finished with a 30-40 year lifespan, and another 120 planned and being permitted.
It is HIGHLY UNLIKELY that the governments of the world building all these nuclear reactors are going to walk away from BILLIONS of dollars spent for a 30-40 year base load power source, that runs more efficiently and 24/7 than both solar and wind, and scrap it all over the next 14 years. That just isn’t going to happen, which makes betting on Uranium miners over the next 3-5 years a solid choice.
I invest in Solar, Wind, Geothermal, Hydroelectric, and Methane extraction as well, but those technologies are only around 3 % of the base load power, so people are delusional if they think the infrastructure for the energy grid can get rid of all hydrocarbons like Oil & Nat Gas & Coal & Biomass, and get rid of all the nuclear infrastructure for Renewable Energy sourcess that quickly.
Lastly, that is why I invest in Lithium as well, because Solar & Wind are not constant, and need battery powered backup energy, and Lithium batteries are the supreme source of storage at this point. People have over-looked and dismissed the importance of battery power up until now, but it is becoming obvious the limitation of Solar & Wind to supply constant power without the assistance of back up batteries.
Just some food for thought from someone heavily invested in the Energy space that has spend a long time tracking all the different companies, technologies, and global initiatives and heard all the arguments from both sides. The truth is somewhere in between the hydrocarbon group, the nuclear group, the renewables group, and the batteries group.
Perhaps a solar panel install business is a good thing to start. Installation charges are more than the cost of panels/inverter now.
Yes only saw video on Sat morning – thanks Silver.
Here in the UK the average Jo/Josie doesn’t much care for clothes, or at least paying over the odds for them. So anything from the ‘Pound-world’ of retailers like Primark will meet their needs. As for more upmarket stores like Marks and Spencer they’ve lost the plot on providing quality clothing, which is both stylish and reasonably priced, thereby massively reducing footfall. Same goes for the less prestigious British Home Stores now in receivership and where without a white knight arriving this weekend will leave 11000 employees out of work. For oldies like me Bhs has always offered reasonable value, whilst offering minimal appeal to the young.