Chain Store Sales
Categories: Investing, Econ, Regulations
Okay, so you know what a chain store is, right? And no, it's not an offshoot of Whips-And, brought to you by the 50 Shades people...
A chain store is one that replicates the buying experience, store after store after store. Like...a Target store looks pretty much the same in almost every store you visit in the country. Like links in a chain. So if the stores are almost identical, then small changes in buying volumes from store to store usually...means something.
Every month, usually the first Thursday of the month, chain stores report their sales numbers from the preceding months. The U.S. Census Bureau puts the data into reports (the Monthly Retail Trade Report, the Advance Monthly Retail Trade Report, and the Quarterly E-commerce, for example) that analysts then study to observe consumer trends. Consumer spending is an enormous part of the economy (up to ⅔ of it), so tracking these spending patterns can be a great indicator of consumer confidence.
Joe is a financial analyst. For months (during a recession), he’s noticed a continuing slump in spending in the pet industries. People aren’t buying pets, and they aren’t spending on the ones they already have. Given how people are about their “fur babies,” Joe takes this to be a grim indicator of how the recession is affecting consumer confidence. People are going so far as to put Fido on a spending diet.
But then one month he notices a spending increase, and the next and then next. From this trend, he can surmise that people are feeling more confident in their economic security. Good news for Fido.
