Retail's re-invention is just getting started

© Phartisan

The retail sector comes under the microscope today. It may come as no surprise that a US National Retail Federation vice president is denying that retailers are in trouble. Nevertheless, he presents an interesting case, showing that competition is tough and foreign retailers are entering the US market; technological change is impacting the way business is done; and that retail is misunderstood. Brands are well-known – but the sector is not dominated by big business. “The truth is that 91% of retail businesses have fewer than 20 employees — increasing that number to 100 employees captures 98% of all retail businesses. These companies that make up the backbone of America tend to be overlooked as the media naturally focuses on the handful of large companies closing stores.” (Although it could of course be argued that those smaller companies also may frequently close doors, to be replaced by others.) He also points out that e-commerce isn’t killing retail – it is retail. It’s an evolving sector and “with any evolution there are winners and losers”.

Talking of which, Sweden’s H&M and Spain’s Inditex have reported results. The former saw sales rise, but slower than expected, with quarterly results of $590m – just missing analysts’ targets. Inditex, meanwhile, enjoyed an 18% rise in first-quarter profits to €645m on revenues up 14%, but said sales had started to slow.