Drugstores are a retail bright spot.

Photographer: Ben Torres/Bloomberg

Americans Are Spending, Just Not at Macy's

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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Retail sales rose faster in April than they had in a year, the U.S. Census Bureau reported today. Some retailers, though, are having a really tough time of it, with Macy's, Nordstrom and Kohl's all reporting disappointing first quarters and experiencing big share price declines.

This juxtaposition of rising retail sales and struggling retailers is nothing new. Overall retail sales have risen year-over-year every month for the past five years. Brick-and-mortar retail traffic, as measured by Prodco's weekly index, has been down year-over-year in 209 of 260 weeks over that period.

If the department stores, mall retailers and other businesses in the retail traffic index are seeing declining traffic, where are the increasing retail sales come from? Here are the four major categories with the biggest year-over-year gains in April, plus motor vehicles and parts, which had experienced strong sales growth until recently.

So ... Americans are going to the drugstore, the home improvement center and the bar down the street. And they're buying stuff online -- that's what "nonstore retailers" mainly means. It's no big surprise that they've taken market share away from brick and mortar. But it's telling that their sales gains seem to be accelerating, not slowing down. 

(Corrects reference to what months are in retailers' second quarter in second paragraph.)
  1. For the chart I only used monthly numbers.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Susan Warren at susanwarren@bloomberg.net