Saturday, May 14, 2016
Associated Press
WASHINGTON
Online shopping is reaching such a critical mass with American households that many of the icons of the traditional mall –from Macy’s to The Gap and J.C. Penney – face an increasingly uncertain future.
A government report Friday suggested a modestly healthy consumer, with retail sales up 1.3 percent in April. Americans are eating out more at restaurants. They’re buying more cars. But the main beneficiaries of spending in the past year have been Amazon, eBay and other internet behemoths.
Spending at these non-store retailers shot up 10.7 percent from a year ago, the government said in a week when earnings reports showed disturbing drop-offs at Macy’s, Kohl’s, Nordstrom and J.C. Penney.
Shoppers who once crowded malls are now ordering on phones, computers and tablets, siphoning sales from physical stores, which face growing pressure to reinvent their businesses.
The magnitude of the change may be just beginning to intensify. Online shopping has attuned customers to focusing on price and hunting for the best bargains, thereby shrinking profit margins at many stores.