A Strong Holiday Shopping Season

 I have a theory that the coming holiday shopping season will be strong. The recent consumer confidence surveys highlighted the fact that Republicans, with Trump's victory, feel much better about the economy and conversely the Democrats have become more pessimistic. My sense is that the Republicans will shop till they drop out of joy and the Democrats will be engaged in the time tested cure of retail therapy. Net. Net. We have the makings for a strong shopping season.

E-Commerce Dominates Holiday Sales

Although brick and mortar retail had a much better than expected holiday sales season, e-commerce dominated the retail scene. Between October and December e-commerce accounted for 49% of the growth in seasonally adjusted total retail sales and 60% of the growth in its addressable market (Defined as total minus autos, gasoline and food services and bars). What this means is that more store closings are on tap as traditional retail reconfigures its store base to account for the growing competition.  Needless to say this eventuality will not be helpful for the struggling mall REITs. The data are below:

                                            In  $ Millions

Category                     October       December      Change

Total                              489,468        495,381        5,913

Less: Autos                    102,794         102,060
          Gasoline                 39,322           40,497
         Rest. & Bars            56,884           57,549

Addressable Mkt.            290,468          295,275      4,807

Non-Store Retail                52,677            55,562      2,885

Non-Store Percent of Total Change  - 49%
Percent of Addressable Change        -  60%