Editor's Note: This is a brief excerpt from an institutional research note written by Hedgeye Retail analysts Brian McGough and Alec Richards. To access our institutional research please email sales@hedgeye.com.
Today’s 60bp negative revision for January Retail Sales (from +0.2 to -0.4%) was obviously disappointing, albeit not terribly surprising to anyone listening to retail conference calls over the past four weeks...
Let’s step away from the obvious for a minute and look at a powerful trend that’s actually investable...
Today, e-commerce accounts for 7.3% of total Retail Sales. A decade ago that number was 2.5%, and five years ago it was 4.4%. At face value we’re talking really small numbers…right? Not really. Consider this…in the fourth quarter, e-commerce accounted for 65% of all incremental Retail Sales.
That’s S-I-X-T-Y F-I-V-E percent! This ramped from 23% a year ago, and 45% in the prior quarter.