Amazon Prime Day Flashes Warning for Retailers

Amazon.com Inc. crowed over this week’s Prime Day sales, boasting that the two-day discount promotion “outpaced” last year’s event. Such a flashy description suggests the unofficial kickoff to the holiday season has set up the broader retail industry for a bright few months. But independent data from credit card transaction data provider Facteus paint a much more muted sales picture, with Amazon making slight gains and the broader retail industry falling behind.

The lackluster spending is a troubling signal for the sector, which was hoping for a rebound after a year of sluggish consumer spending. Instead, retailers are facing a disappointing end to the year with few choices other than to take on risky promotions to keep their heads above water — a strategy that will widen the gap between the haves and have-nots of the sector.