Current trends in US retailing
There was an interesting article in the FT today which showed how brokers have cut earnings estimates for 62 retailers and only upgraded 16 in the last three months.
This came following weak US retail sales in December followed by a very sluggish January. Brokers put the cuts to forecasts down to rising costs, bad weather a late Easter and smaller-than-usual tax refunds. Losers included L Brands – which owns Victoria’s Secret, Barnes & Noble and JC Penney while companies that saw upgrades included Amazon, Best Buy and Foot Locker.
There was also discussion of another interesting trend in today’s FT which was that of the growing momentum of own-brand sales for US retailers.
It seems that, despite rising wages and a strong economy, American shoppers are still very cost conscious and are increasingly turning to own brands from retailers such as Kroger, Costco and Target as a cheaper alternative to buying products from famous brands.
With established retailers putting more weight behind own-brands, the likes of Campbell Soup, General Mills and Kraft Heinz will have to watch out.
Big Tech in the aftermath of the New Zealand attack
The other thing I wanted to talk about today was Big Tech in the face of the New Zealand Mosque attacks.
Basically, the fact that this tragedy was live streamed for all to see on Facebook Live, has reignited the debate on what social media giants are doing to control content.
Share prices of these tech giants have been recovering this year after taking a kicking in the last quarter of 2018 and it seems that, once again, the collective responsibility of these companies is being called into question.
I suspect that the likes of Facebook, Google, YouTube and Twitter are going to have to put a lot more money into ensuring a swift solution to this problem as pressure retightens in this area once more.
They are going to HAVE to show they are doing something concrete here otherwise advertisers could just walk away.