According to the Financial Times, Weak shopping mall traffic continues to wreak havoc on major US retailers, with Michael Kors the latest to cut its sales and profit forecasts as it struggles to battle dwindling consumer visits to US suburban centres.
Shares in the high-end clothes and accessories retailer tumbled by more than 15 per cent, the most in nearly two years, as it also reported a bigger-than-expected drop in a key sales metric for its fiscal third quarter.
Like-for-like sales fell 6.9 per cent during the three months to the end of December, a steeper drop than the 5.4 per cent fall that the market was expecting.
“Overall, we were disappointed with our North American and European comparable store sales performance during the quarter,” said John Idol, chief executive.
“We believe that headwinds in these markets will continue throughout the spring season as we face reduced traffic trends in shopping malls, currency fluctuation, uncertainty surrounding certain political changes in European countries and the implementation of our reduced promotional cadence in North America.”
Yes, slow wage growth in the US is killing some retailers.
But competition from internet competitors like Amazon are helping to crush retailers (and US shopping malls). Notice the rise in Amazon’s stock price since 2015.
While mall retailers Michael Kors, Macy’s and Sears are declining.
And watch out grocery store chains! Amazon now has Amazon Fresh that will deliver groceries to your door. Including hamburgers made from 1 cow (I understand the allure of single barrel Bourbons but why would I care if my burgers come from a single cow? Imagine asking your local McDonald’s or Wendy’s server if their meat comes from single cow.)
Yes, mall desertion is a growing problem in the US. But probably not this bad.