It is no news to anyone that high-street stores have been adversely affected by the astronomical rise of e-commerce, just a stroll around many British high streets and the absence of small-business stores and the presence of betting shops, discount shops jump out at you. And similar patterns have been emerging throughout the US. Since 1992, there have been two sizable shifts. One is the almost reversal of fortunes between department stores – which used to contribute to 15% of core retail sales – to superstores, which now occupy almost exactly the same market share. The second is much more recent and is, of course, the emergence of e-commerce. However, the effect has been different, with superstores largely having their percentage of core retail sales remain constant since 2009 and instead smaller businesses bearing the brunt of the blow. The outlook does not seem to be wavering either. The KMPG/Ipsos Retail think tank recorded retail health to be at 82% of what it was a decade ago and in one of the starkest examples, Sears – the ex-mammoth of US retail – has lost $26Bn of value since 2007 and has just announced further store closure and liquidations.
However, maybe one man has a plan. Amazon, the Lex Luthor of the high-street, had a value crash of $5.7Bn as Donald Trump targeted the online giant in a damaging tweet. “Amazon is doing great damage to tax paying retailers. Towns, cities, and states throughout the US are being hurt – many jobs being lost” the tweet read, surely a damning statement to one of the world’s largest companies. But after all, it is just a tweet. Right? With an ordinary politician, you’d think so, but Trump has made a habit of announcing policy plans over twitter, from his views of transgender military eligibility to announcing the sacking of advisors, so it could be a look to the future as to what direction the Trump administration will take. Furthermore, with his promises of putting the American people first, it is likely Trump will attempt some reform to rebalance the retail sector. This news, coupled with better than expected reports for Urban Outfitters who, despite a predicted earnings per share of 36 cents, reported an EPS (earnings per share) of 45c, show that investors have potential gains to make as high-street firms may have short term gains (UO stock flew up by 1/5th to $20.13) due to pessimistic predictions, but also possible long term investment opportunities if the US government stands by Trump and attempts to go hard on online retailers.
And whilst many, including myself, find a Trump “Superman of the high-street”, situation unlikely, cast your mind back to Ford announcing the killing of a Mexican plant and focus on its Michigan factory after criticism from Trump or Walmart creating a “2017 goals for American job growth and community investment” programme amid the Trump administrations launch of an investigation into Chinese trade practises.