This chart is another really ominous sign for the retail industry

The retail sector’s having a tough time. And this week in particular was pretty rough.

Earlier on Tuesday, the entire industry was getting crushed in the markets. Then on Thursday after hours, high-end retailer Nordstrom got annihilated after an abysmal earnings report, and on Friday morning JC Penny started tanking after terrible sales.

But it gets darker.

In a recent note to clients, Societe Generale’s Aneta Markowska shared a chart detailing just how Americans’ spending has changed since June 2014 (when oil was over $100 per barrel), as well as how spending changed since 2007.

Or, in English, how US consumers are spending and/or saving all the “extra money” from oil prices.

Notably, while the share of income allocated to healthcare and restaurants has increased in the last two years, the share of income allocated to clothing/footwear and furnishings/household equipment declined.

“In other words, traditional retailers have seen little to no benefit from the energy dividend,” explained Markowska. “Evaluating the changes since 2007 reveals similar results. The post-crisis consumer is more health-conscious and experience-seeking, favouring services over goods.”


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