Retail’s Ups And Downs: Best Buy, Outlet Malls And Pokémon GO

The world of retail can be a lot like riding a roller coaster. Here's this week's winners and losers.

The world of retail can be a fickle mistress. One quarter, a company can post killer or even just better-than-expected earnings and be Wall Street’s stock du jour, only to fall flat on its face the next quarter by missing earnings estimates by a couple of cents per share.

Or in the case of Chipotle, years and years of buzz, customer loyalty and positive brand image were undone after a couple of diners got sick from eating at Chipotle locations across the country (which the brand is still trying to recover from).

With that said, PYMNTS decided to take a look at some of retail’s biggest winners and losers of the moment.

 

UP

Best Buy was having one of those examples of a very good stock day on Tuesday (Aug. 23) after the company posted strong quarterly earnings. The electronics retailer’s stock hit a 10-month high after it rose more than 16 percent on Tuesday on the heels of the company’s earnings announcement, which showed that both sales and profits beat industry expectations by some pretty wide margins. Best Buy reported $8.53 billion in revenue from the quarter, about flat from the same period last year (revenue was actually estimated to decline), and saw a 6 percent increase in its profits to $185 million.

It’s also a good time to be an outlet mall, apparently. As recently released data from the Cowen Consumer Tracker Survey shows that customer traffic hit a two-year peak in July, with 26 percent of all U.S. shoppers visiting an outlet mall during that month. That’s also a 4 percent increase in visits since March. And it seems to be thrifty millennials powering the movement by visiting outlet stores, like Nike, Adidas and Under Armour, in search of sports shoes and athleisure wear, according to Footwear News.

It’s also not a bad time to be a robot. Seriously. As recent data released by the Association for Advancing Automation shows, there were more robots ordered for manufacturing and business purposes in the first half of 2016 than at any point ever before. And those numbers are only expected to rise in the coming years as advances in automation technology and the use of ever more robots in manufacturing are expected to “fuel the next wave of productivity and U.S. job growth.”

 

DOWN

But, for every winner, there’s a loser, and surprisingly, the record-breaking Pokémon GO app game tops that list this week. New data shows that, just two months after a release that saw it shatter pretty much every downloadable app store record, users are losing interest in the augmented reality game pretty quickly. According to Bloomberg, the game peaked at about 45 million daily users in mid-July but was down to only about 30 million daily users just last week. That’s a drop of about a third of its daily users not even two months since the game’s initial launch.

It’s also a bad time for startups in the Bay Area. Yeah, sure, there will still probably be no shortage of startups eager to set up shop in Silicon Valley due to its skilled labor force and network of industry connections, but a new report from The New York Times finds that many fledgling startups are ditching the region’s high rents and crushing commutes for, of all places, Phoenix, Arizona. With wages, taxes and energy costs about 25 percent less in Phoenix than in the Bay Area, the city has seen an 8 percent increase in tech jobs in the past year alone.

And you can say goodbye to the “Store” in “Apple Store.” No, Apple isn’t closing down all its brick-and-mortar locations. It’s more like a “clarification” to reinforce to customers that Apple physical locations are more than just retail stores. So, the Apple Store in Union Square, for example, will henceforth be known only as Apple Union Square.