Here’s why retail is making a comeback

The strong economy is giving the sector a boost

Aug.August 23, 2018 11:00 AM

(Credit: iStock)

The retail sector may be bouncing back.

In the face of challenges, companies like Walmart, Target, Nordstrom and Best Buy have expanded their services. And it appears to be paying off: Walmart reported its best quarterly sales gain in a decade, while Target saw the biggest jump in 13 years, according to Bloomberg.

“The American retail sector is enjoying a renaissance,” Neil Saunders, managing director at GlobalData Retail, said in a note. “Sentiment is upbeat and spending fairly carefree.”

Though retailers like Toys “R” us and Sears have struggled, the overall macro environment is strong. Consumer confidence is at a 17-year high while unemployment is near record lows — encouraging shoppers to spend, the report said.

Nordstrom and Kohls also fared well, with results surpassing analysts’ estimates. The strong numbers are being driven by both online sales and stores will be experimenting with new services. Walmart’s, for example, launched a text-based shopping concierge service for New Yorkers.

But there are other challenges, too. Retailers have been ramping up inventory for the holidays and to avoid the potential effect of tariffs. But if they bet wrong, they’ll be stuck with products they can’t sell. [Bloomberg] — Meenal Vamburkar

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