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Kristin Bentz on Today's Retail Numbers (Audio) · Bloomberg Intelligence

• 0:00
  Speaker 1: Uh, this is taking stock with Pim's Box and Kathleen
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  Speaker 1: Hayes on Bloomberg Radio. Retail sales, the consumer, what's driving
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  Speaker 1: uh the economy forward or not? As the case, maybe
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  Speaker 1: it looks like in August, maybe the consumer took the
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  Speaker 1: foot off the gas, maybe even put the brakes on
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  Speaker 1: a bit. We're gonna find out what it means for
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  Speaker 1: various kinds of retailers and for spending overall. We're happy
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  Speaker 1: to welcome back to the show now Kristen Ben's. She's
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  Speaker 1: president of Talented Blonde ll l C, a well recognized
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  Speaker 1: retail expert, and you can follow her on Twitter at
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  Speaker 1: the Talented Blonde Kristen. The headline retail sales of what
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  Speaker 1: down zero point one percent? Uh? Take out autos down
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  Speaker 1: minus point three and within that we saw weakness and
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  Speaker 1: some key things like building materials and department stores didn't
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  Speaker 1: look so hot. How does how do retailers look to
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  Speaker 1: you broadly right now? Well? Not so hot as an understatement,
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  Speaker 1: as you know. And sure Kim Alwaya on on this shortly. Um,
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  Speaker 1: you know, retail it's a tough spot to be in
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  Speaker 1: right now. And what I'm seeing from these numbers is
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  Speaker 1: you know, I think the consumer is quite healthy. Um.
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  Speaker 1: I think she's healthy. I think she's spending. She's just
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  Speaker 1: not spending in traditional areas where Wall Street wants her
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  Speaker 1: to spend. She's not spending at department stores. Um. But
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  Speaker 1: she's definitely spending online as we saw those non store
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  Speaker 1: retail numbers, which is a proxy for online spending in
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  Speaker 1: those world I believe sixteen point five percent. Correct me
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  Speaker 1: if I'm wrong, Kristen. I want to know whether we're
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  Speaker 1: going to have a digital Christmas, A digital Christmas. Yeah.
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  Speaker 1: I think now we're in this you know, kind of
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  Speaker 1: Instagram Snapchat economy, and I think you're definitely going to
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  Speaker 1: have a digital Christmas, especially if Amazon has anything to
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  Speaker 1: say about that. It's all drones, man, drones. Yeah. I
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  Speaker 1: just do want to point out that maybe the uh
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  Speaker 1: six percent you saw was year over year, because according
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  Speaker 1: to Mickey Leafley over at Barrenburg, there was actually a
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  Speaker 1: zero point three percent decline in non story retail sales
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  Speaker 1: in August and it was notable. Noticeable. Notable, he said,
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  Speaker 1: because it was the first decline since January of twenty fifteen.
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  Speaker 1: Non story retail sales have been growing at a solid
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  Speaker 1: pace as people book, you know, shift over to online buying.
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  Speaker 1: So I think at least Mickey Leavy was taking that
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  Speaker 1: as a bit of a red flag to even see
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  Speaker 1: online sales pull back for a month. That was your
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  Speaker 1: and your just to clarify, Um, I'm not worried, uh
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  Speaker 1: with with the rise of retail that we're seeing in
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  Speaker 1: the way that people are buying, it's it's much more experiential,
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  Speaker 1: So experiences and experience a retail rule of the day. Um.
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  Speaker 1: You know, if you just take a look at any
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  Speaker 1: social media, it's less about what I'm wearing and more
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  Speaker 1: about where I am, what I'm doing. Time is luxury
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  Speaker 1: and how are we spending that time. And I want
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  Speaker 1: to show the world what I'm doing with my time
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  Speaker 1: with my family, with my friends, with my partner, etcetera.
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  Speaker 1: And I think that is the new currency is experiences.
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  Speaker 1: I wanted to if I could get your your reaction
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  Speaker 1: to a report from red tail Next that says that
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  Speaker 1: digital sales are going to climb to six teament of
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  Speaker 1: total retail sales. That's up from fourteen point four last year,
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  Speaker 1: and that also includes in the perspective and eleven decline
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  Speaker 1: in brick and mortar store traffic that happened in November. Absolutely.
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  Speaker 1: I mean, look what's happening with Macy's, which is you know,
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  Speaker 1: a proxy and you know I'm I'm an excellemnite, and
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  Speaker 1: so eight years ago today, you know, we were all
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  Speaker 1: too big to fail, right, including retail. And what people
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  Speaker 1: don't know is that Macy's is like the top three
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  Speaker 1: digital retailer out there. It's one of the largest internet
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  Speaker 1: companies in the world. And if Macy's can't make that work,
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  Speaker 1: as we've seen with some massive store closings that they're planning, um,
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  Speaker 1: they begin an upgrade this week because of it, um,
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  Speaker 1: that doesn't bode well for the rest of retail. So really,
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  Speaker 1: we are obviously in that in that digital economy, and
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  Speaker 1: I do believe we will see a digital Christmas back
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  Speaker 1: to you. Okay, so what about the home improvement chains,
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  Speaker 1: because they've been uh, you know, pretty popular with a
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  Speaker 1: lot of investors, they had a not so good quarter.
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  Speaker 1: Is this a one month affair? Is this a trend?
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  Speaker 1: Are our people pulling back from home improvement, which has
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  Speaker 1: been a pretty big trend for a while. I think
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  Speaker 1: it could be cyclical. But also if we want to
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  Speaker 1: look at companies like Airbnb and that whole trend of
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  Speaker 1: you know, um kind of renting your experience UM not
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  Speaker 1: necessarily hotels, but also UM in other housing. I think
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  Speaker 1: people are going to start seeing this other revenue stream
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  Speaker 1: UM by you know, having people come in and occupy
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  Speaker 1: space and make money from that space, and that means
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  Speaker 1: their home and oftentimes improving their homes. So I would
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  Speaker 1: see that that indust ruby bony well um as opposed
• 4:45
  Speaker 1: to not what about the ups uh not a parcel
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  Speaker 1: service rate increase that's effective December the twenty six, that day,
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  Speaker 1: right after Christmas, US ground service daily delivery will increase
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  Speaker 1: by about five cent uh and the freight U UPS
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  Speaker 1: Freight announced an average of about a five percent channel
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  Speaker 1: increase that was effect that's effective September. Well, I think
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  Speaker 1: you're going to see that, you know, cost of doing
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  Speaker 1: business for for lack of a better term, being passed
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  Speaker 1: on to the consumer and there's really nothing we can
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  Speaker 1: do about that, especially with all this sports drama. I
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  Speaker 1: think you're going to see a spike in retail pricing
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  Speaker 1: and definitely a spike in shipping. Is that kind of
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  Speaker 1: you know, plays its self out within the holiday season.
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  Speaker 1: I want to Thank you very much for joining us.
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  Speaker 1: Kristen Bentz is president of Talented Blonde. They're based in Phoenix, Arizona.
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  Speaker 1: You can follow Kristen on Twitter at Talented Blonde. This
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  Speaker 1: is taking Stock, I'm pim Fox my co host Kathleen Hayes.
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  Speaker 1: This is Bloomberg. Yeah,