A Closer Look at Retail

Retail sales are announced today so it seems like a good time to look at the various sub-sectors of retail.



Electronic Stores are still benefiting from consumers wanting the "next biggest thing" in electronic land. Best Buy and Gamestop have essentially stopped the bleeding in this sector. However, there are some big losers here like Circuit City and Radio Shack. So there are some problems waiting to happen.



Grocery stores are a pretty defensive play in the market, so it shouldn't surprise anybody that this sector is still moving up. But it is currently trading at it's three year support level, so all is not perfect.



Drug stores have had a nice multi-year run. They consolidate, rally and consolidate in a fairly typical pattern. Because they are also very defensive in nature I wouldn't expect them to fall through the floor anytime soon.



Discount/variety floors are also somewhat defensive in nature. While they do sell impulse items etc.., their low prices make them a bit more immune to economic downturns. However, some stores in this sector have taken some pretty big hits -- take a look at Big Lots, Dollar Tree, and 99 Cent Store. So things could get a bit more dicey here.



Auto parts recently broke a 5 year uptrend. What's interesting here is I would have thought these stores would benefit from an economic slowdown -- as consumers feel more and more constrained they are more likely to repair their cars themselves. However, breaking a 5 year uptrend is not a positive development.



Mail Order stores have been dropping for about 2/3 of a year. They have fallen through some key support levels as well.



Home improvement stores are getting hit in the real estate slowdown. Like the mail order sector, these stores have been falling far about the last 2/3 year and have also moved through key support levels. I wouldn't think this would change anytime soon with the housing mess still far from over.



Home furnishings are also getting hit by the housing mess. This is going to continue as well.



Department stores are taking a big hit right now. The primary reason is an anticipated consumer slowdown. They've fallen through some big support levels and continue to move lower.



Apparel stores are the latest casualty of selling.