Has Retailing Become A Zero Sum Game?

Looking at recent earnings reports from the country’s major retailers, it is apparent that some have been very successful, handily beating expectations, while several have reported disappointing results and provided reduced guidance, with surprisingly few in between.  Has retailing devolved into success based on grabbing market share?  To some extent, this may be the case.  … Continued

Wealth Effect

According to Wikipedia, wealth effect is the change in spending that accompanies a change in perceived wealth.  Usually the wealth effect is positive: spending changes in the same direction as perceived wealth. People typically spend more overall when one of two things occur:  when people actually are richer, or when people perceive themselves to be … Continued

Consumer Spending and Economic Growth

The U.S. economy is generally believed to be substantially consumer driven.  Accordingly, trends in consumer spending are closely watched by investors and economists.  With an economy that is largely dependent on consumer spending, it is important to recognize that an individual consumer can spend only so much. Recently reported retail sales figures have been disappointing.  … Continued

Wealth Effect?

It is clear that there have been significant increases in U.S. household wealth since the depths of the 2009 financial crisis, largely due to substantial increases in stock market and home valuations.  In the past, large gains in household wealth have stimulated higher levels of consumer spending.  This does not appear to be the case … Continued