With that backdrop, investors were bracing for the worst on Friday, when the government was due to release the monthly retail sales report. Yet, lo and behold, the Commerce Department reported that retail sales actually surged April.
In fact, the 1.3% increase in April was the fastest pace of growth in more than a year.
With these mixed messages, it's easy for an investor to get confused about the outlook for retailers. Are things rosy or are things gloomy?
Retail Sales Growth (month-over-month)
Department Stores Struggle, Overall Sales Solid
The answer to that question largely depends on what type of retailers we're talking about. There's no question that department stores―like the aforementioned Macy's and Nordstrom―are doing poorly.
According to the latest Commerce Department figures, sales in that category were down 1.7% from a year ago in April.
However, aside from department stores, electronic stores and gasoline stations, retail sales are doing just fine. Overall sales were up by 2.7% year-over-year in April, with one category in particular leading the charge―online.
Online sales were up a whopping 10.2% from a year ago in April.
Online Sales Steadily Growing
Of course, this trend is nothing new. Consumers have been gravitating toward doing more of their shopping online for years now.
According to the Commerce Department, total e-commerce sales in 2015 were $341.7 billion, which represents 7.3% of total sales. That's up from $91 billion, or 2.5% of total sales, in 2005.
Most analysts believe that e-commerce sales will continue to grow by double-digit percentages annually, gaining market share at the expense of brick-and-mortar sales.