Looking for more proof of just how hard it is for traditional retailers to compete in a world that’s increasingly dominated by Amazon? Nordstrom and Gap are the worst-performing stocks in the S&P 500 so far this year.
All of those companies have recorded sluggish sales and profits as consumers increasingly shop online. Several of those companies are even expected to post a decline in earnings and revenue this year.
Other retail and consumer companies have also had trouble. Food giant Kraft Heinz (KHC), regional mall real estate owner Macerich (MAC), grocery king Kroger (KR) and drug store chains Walgreens (WBA) and CVS (CVS) all have performed poorly this year.
These companies are hurting despite the fact that overall retail spending has remained relatively strong. Consumers have continued to shop even as trade war concerns raise the risk that tariffs will lead to higher prices on goods made in China.
The broader market has been on fire this year, too. The S&P 500 is up 17% through the first half of 2019.
Some retailers have done a better job of competing with Amazon in the digital marketplace. And they have been rewarded by consumers and investors.
Shares of Walmart (WMT), which has bulked up its e-commerce business through a wave of acquisitions over the past few years, are up nearly 20% this year, for example. Target (TGT)and Costco (COST) have each soared roughly 30%.
Dick’s Sporting Goods (DKS) is up more than 10% as well, a sign that it’s taking advantage of problems at Foot Locker.
And Home Depot (HD), which faces less competition from Amazon and online shopping in general, is up more than 20%.
American consumers are alive and well. They’re just not shopping at the mall anymore.