Old-school retail has been getting walloped lately. Earnings for such venerable institutions as Macy’s, Nordstrom, and Kohl’s all came in weak. Plus the recent retail sales report didn’t look too good for brick-and-mortar stores.
Torsten Sløk, chief international economist at Deutsche Bank, has one chart in his monthly chartbook that lays out a pretty straightforward the reason for the decline.
In the chart, Sløk presents the startling decrease in the amount of income Americans spend on clothing. Since 1980, the share of consumers’ money going to clothing has been sliced nearly in half:
As Sløk points out, the fortunes of online retailers and department stores have slowly been diverging as more shoppers are flocking online. So not only are shoppers spending more on non-clothes items, but they are increasingly looking for other sources of goods.
Another chart from Sløk shows that overall spending at nonstore retailers (mostly online retailers) has been increasing for the last several years, while department store spending has been flat or declining:
So there you have it, the autopsy report for department stores in chart form.
Business Insider Emails & Alerts
Site highlights each day to your inbox.