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Nightmare At The Mall: Brick-And-Mortar Retail Totally Loses It

Stunning acceleration of a trend

On the surface, it was the same lackadaisical data we've become inured to in this wondrous economy. But beneath the surface, there lurked a nightmare for the already struggling brick-and-mortar retailers.

Total retail sales in July, at $457.7 billion, remained stubbornly flat from June, and ticked up a measly 2.3% from a year ago, adjusted for seasonal variation and holiday and trading day differences, but not inflation, according to the Commerce Department.

As crummy as it was, it was propped up by sales of motor vehicles and parts, the largest category at 21% of total retail sales. They rose 1.1% for the month and 2.4% year over year to $93.2 billion. Auto sales have been booming. In terms of unit sales, they set an all-time record last year, funded by cheap debt and loosy-goosy underwriting standards; so comparisons this year are on top of a year that may be hard or impossible to beat for a while, with the industry already talking about a "car recession."

And here's what else propped up retail sales: Sales by "non-store retailers," which includes e-commerce, soared 14.1% from July last year to $47.7 billion, now accounting for 10.4% of total retail sales. Their share has doubled since 2002.

So retail sales without autos and without non-store retailers - an approximation for brick-and-mortar retailers other than car dealers - came in at $321 billion in July not seasonally adjusted. A year ago, they were also at $321 billion. They have not moved one iota over the past year. And they're up only 2% from two years ago.

That's not...


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