第七次年度錢包分析：以“砰”的一聲開始以“嗚咽”聲結(jié)束

1、Broadlines & Hardlines Retail7th Annual Share of Wallet Analysis - 2018 Started with a Bang, Ended with a Whimper; 2019 ImplicationsIn our seventh annual Share of Wallet analysis, we examine services and retail spending shifts while also digging into the consumer slowdown that occurred at the end of

2、 last year. Key takeaways include: (1) 2017 and most of 2018 were robust times evidenced by accelerating spending, share dynamics, category shifts, and a narrowing growth gap vs. ecommerce. However, the deceleration/increased volatility since last summer suggest sales softness goes beyond one-time f

3、actors. One- and two-year growth trends inflected positively at the start of 2017, the peak one-year pace occurred in holiday 2017, the peak two- year trend happened in Nov 2018, and both have been deteriorating since (core sales had been growing 5-6% but decelerated to 3.5%). (2) Indeed, categories

4、 like apparel, furnishings, gen merch, and electronics drove the record Christmas in 2017 and led the holiday bust in 2018. We worry that the underlying moderation and a potential big tax payment season will lead to investor disappointment despite easy April comparisons while the May reporting seaso

5、n coincides with lapping a “perfect” 2Q18 (smells like a potential trap). Generally, a less robust environment leads to fewer store/mall trips, which could exacerbate ecommerce/share pressures in these sectors (plus sporting goods) and put pressure on companies whose fortunes rose with the tide.From

6、 a stock perspective, we continue to favor “defensive” growth names and companies taking HYPERLINK /research/content/GPS-2860296-0 share (autoparts, COST, HD, ULTA) while we are concerned about names that fall into the greater risk bucket (DKS, ODP, WSM). For TGT (which has high exposure to these ca

7、tegories but has been gaining share), WMT (plus/minus share across the store), BJ (share donor), and LOW (turnaround story in a moderating backdrop), a big test lies ahead. 2Q was also a monster for BBY.2018 started with a bang but ended with a whimper. As discussed in our HYPERLINK /research/conten

8、t/GPS-2614748-0 deep dive last year, spending inflected in early 2017 driven by wage growth and then tax reform but the road ahead looks tougher (see our “ HYPERLINK /research/content/GPS-2902485-0 2019: Smells Like HYPERLINK /research/content/GPS-2902485-0 Late Cycle”). One- and two-year growth tre

9、nds inflected positively at the start of 2017, the peak one-year pace occurred in holiday 2017, the peak two-year trend happened in Nov 2018, and both have been deteriorating since. Core sales had been growing 5-6% but decelerated to 3.5% since October. Figure 1.Volatility also up; May guidance seas

10、on looms. The volatility of monthly spending is also up dramatically (+70%). Clearly, some of this is comparisons, weather, and stock market volatility but the underlying moderation still stands (weather excuse commentary seems inversely correlated to comp level). We expect a bounce in March-April,

11、but the retail second quarter (ending July) looks particularly difficult given a near perfect setup last year (spring demand shift, weather, wage/tax reform). Summer looks HYPERLINK /research/content/GPS-2952873-0 cooler YOY as well. Figures 2-3.Discretionary categories leading the way back down. Ho

12、liday sales grew 2.3% (vs. 5.9% in 2017), the most tepid season since 2009. Categories that showed the biggest improvement in 2017 led the way back down as a “flush” consumer turned more cautious. Sans home improvement (+51 bps), all of the categories we track decelerated sharply in 4Q: sporting goo

13、ds (-601 bps), furnishings (-516 bps), electronics (-393 bps), non-store (-222 bps), and apparel (-210 bps). Figures 4-8.North America Equity Research04 April 2019Retailing Hardlines Christopher Horvers, CFA AC (1-212) 622-1316 HYPERLINK mailto:christopher.horvers christopher.horversBloomberg JPMA H

14、ORVERS C. Jerry Sullivan(1-212) 622-5928 HYPERLINK mailto:jerry.sullivan jerry.sullivanTami Zakaria, CFA(1-212) 622-9888 HYPERLINK mailto:tami.zakaria tami.zakariaTori K Bertschy(1-212) 622-0826 HYPERLINK mailto:tori.bertschy tori.bertschyJ.P. Morgan Securities LLCSee page 26 for analyst certificati

15、on and important disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only

16、a single factor in making their investment decision. HYPERLINK / Christopher Horvers, CFA (1-212) 622-1316 HYPERLINK mailto:christopher.horvers christopher.horversNorth America Equity Research04 April 2019Ecommerce growth gap narrowed during spending peak but is creeping back. Brick and mortar store

17、s narrowed the growth gap difference with the pace of ecommerce sales by 260 bps in 2018 (from 950 bps in 2017 to 690 bps in 2018). We believe this reflects brick & mortars increasing competitiveness with online and a flush environment that led to more store trips. However, similar to the trend note

18、d above, after narrowing since early 2017, this gap reached a low point in July 2018 and has since been creeping back in the other direction (averaging 760 bps since August). Figure 9.Services share capture moderates further demonstrating the good times. From 2012 to 2017 total goods spending lost 1

19、85 bps of wallet share to services, with nondurable goods (food & beverages, clothing, HPC, etc.) donating 201 bps (an estimated $284B shift away from retail!). In 2018, services share only gained 7 bps (vs. +11 bps LY and 62 bps the year prior), with the moderation led by recreation services (i.e.

20、parks, theaters, museums, sporting events, etc.; -8 vs. +3 in 2017), health care (-2 vs. +4), and travel/transportation (-3 vs. +1). We view this share dynamic as another sign of the strength of the consumer during most of 2017-18. Figures 10-14.Apparel, furnishings, and electronics looks like a ris

21、ing tide not share gains per se. Digging deeper across the two data sets, we see that apparel lost less share per the PCE report (-2 bps vs. -7 in 2017) and the Census indicates flat share (vs. -15 bps in 2017). Similarly, electronics lost less share per the Census (-5 vs. -11). For home furnishings

22、, the Census indicates share loss (-3 vs. +2) and a more expansive “home” category in the PCE report suggests modest deterioration as well (flat vs. +1 in 2017). Net-net, in a slower environment in 2019, we worry about retailers in these categories more than others given their discretionary nature,

23、continued share headwinds (fewer store/mall trips = less impulse purchasing), and the lack of acknowledgement of the macro support over the past two years by some management teams. Figures 15-22.Restaurants reverse course, moving from big share losses to strong gains. This category (covered by John

24、Ivankoe) saw a notably reversal of fortune in 2018 with the Census (+13 bps of share vs. -19 in 2017) and PCE (+3 vs. -8) telling similar stories. Inflation was only modestly higher YOY (+30 bps), so perhaps the rising tide of the consumer again as well. Perhaps it is also related to the longer-term

25、 trend of eating out as grocery continued to lose share in both the Census (-17 vs. -19) and PCE (-7 vs. -15). Figures 23-30.Home improvement and auto spending reverse course and donate share helping other categories. Home improvement and motor vehicle parts & dealers lost wallet share after both ha

26、ving gained share in each of the last five years. Home improvement donated 9 bps of share, the first time since 2011 that the category did not gain (we are roughly back to the long-term average share). Both of these clearly helped the other categories given they represent 27% of the consumers wallet

27、 (auto is 21%). Figures 30-34.Table of Contents HYPERLINK l _bookmark0 2018 Started with a Bang but Ended with a Whimper4 HYPERLINK l _bookmark1 Consumer Getting Weary; Spending Slows to 3% from 5-6%4 HYPERLINK l _bookmark2 Holiday Season Disappoints Across the Board6 HYPERLINK l _bookmark3 Brick &

28、Mortar Narrows the Performance with Ecommerce but the Trend Is HYPERLINK l _bookmark3 Reversing9 HYPERLINK l _bookmark4 Diagnosing Share of Wallet Shifts PCE10 HYPERLINK l _bookmark5 Services Share of Wallet Gains Continue to Moderate; Recreation and Health Care HYPERLINK l _bookmark5 Reverse Trend

29、and Cede Share11 HYPERLINK l _bookmark6 Durables Lose Ground Driven by Autos; Non-Durables Lose Less Share on Grocery HYPERLINK l _bookmark6 and Apparel12 HYPERLINK l _bookmark7 Diagnosing Share of Wallet Shifts Retail15 HYPERLINK l _bookmark8 Census Retail Sales Necessities Dominate Share15 HYPERLI

30、NK l _bookmark9 Gas Stations, Online, and Restaurants See Fastest Growth in 2018, Home and Auto HYPERLINK l _bookmark9 Slow Sharply15 HYPERLINK l _bookmark10 Share Gainers Gas Stations, Online, and Eating Out16 HYPERLINK l _bookmark11 Losers Autos, Gen Merch, Grocery, Sporting Goods and Home Improve

31、ment; HYPERLINK l _bookmark11 Apparel Flat16 HYPERLINK l _bookmark12 Gas Stations Accelerate Share Growth, Online Moderates, Home Improvement and HYPERLINK l _bookmark12 Car Dealers Become Donors18 HYPERLINK l _bookmark13 Running the Stacks19 HYPERLINK l _bookmark14 A Closer Look at the Longer Term2

32、0 HYPERLINK l _bookmark15 Share of Wallet Shifts Since 199221Share of the consumer wallet can be looked at through the Personal Consumption Expenditures report (per the BLS) and the Retail Sales report (per the Census). The former includes services spending while the latter does not but has a more g

33、ranular breakdown by retail channel. The other issue with the Retail Sales report is that online sales from brick and mortar retailers are supposed to be reported in “non-store retailing” and not with the traditional categorization.2018 Started with a Bang but Ended with a WhimperConsumer Getting We

34、ary; Spending Slows to 3% from 5-6%As discussed in our HYPERLINK /research/content/GPS-2614748-0 deep dive on the lower-end consumer last year, spending inflected in early 2017 with core retail sales (defined as “sales at general merchandise, home furnishings, electronics/appliance, clothing and acc

35、essory, building materials, sporting goods/hobby, non-store, and automotive retailers”) accelerating sharply. However, as noted in our “ HYPERLINK /research/content/GPS-2902485-0 2019: Smells Like Late Cycle” outlook, trends started to turn in August 2018 and have been slowing ever since.Indeed, as

36、noted below, one- and two-year growth trends inflected to the positive at the start of 2017, the peak one-year pace occurred in holiday 2017, the peak of two-year trend happened in November 2018, and both have been deteriorating since. Core retail sales had been growing at a 5-6% pace but have decel

37、erated to a 3.5% trend since October.8.0%7.0%6.0%5.0%4.0%3.0%2.0%1.0%0.0%Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Jul-18Oct-18Jan-19Core Retail Sales YOY2-year Core Retail Sales YOYFigure 1: Volatility Is Back Two-Year Trend DeterioratingSource: Census Bureau and BLS.Moreover, as

38、noted below, the volatility of monthly consumer spending is also up dramatically over that period (+70%). Clearly, some of this is comparisons, some unfavorable weather (e.g., Feb and March), and some external factors (stock market volatility and government shutdown) but the underlying moderating tr

39、end still stands out. Said another way, we do expect a bounce in March and April, but the retail second quarter (ending July) looks particularly difficult given a near perfect setup (e.g., Spring demand shift, favorable summer heat, wage/tax reform lift).Figure 2: Standard Deviation of Monthly YoY %

40、 Growth by PeriodPeriodStd. Dev. Of Monthly YOY%Growth*201018420119120121292013582014137201577201673April 17 - Aug 1891Sept 18 - Feb 19155*+/- bps. Source: U.S. Census Bureau.1 AutoZone and Costco comps calendarized. 2 US DTC only* GPC reflects US NAPA comps* Covered by JPM Analyst Ken Goldman* Cove

41、red by JPM Analyst Matt BossFigure 3: Same-Store Sales by Quarter20161Q172Q1720173Q174Q1720171Q182Q1820183Q184Q1820181Q19E2Q19E20193Q19E4Q19E2019EAdvance Auto PartsAAP(1.1)%(2.7)%0.0%(3.4)%(2.6)%(2.0)%(0.8)%2.8%4.6%3.4%2.3%2.1%0.9%2.4%2.4%1.9%AutoZone (1)AZO1.2%(0.8)%1.0%2.3%2.2%1.2%0.6%2.2%2.7%2.6%

42、2.0%1.8%1.8%1.8%1.8%1.8%Monro Muffler (ex-tires)MNRO(2.7)%(2.6)%1.4%(0.4)%(1.1)%(0.7)%(0.1)%0.9%1.7%1.8%1.1%3.1%2.8%3.3%2.8%3.1%Genuine Parts Company(2)GPC0.5%0.5%1.5%1.0%1.0%1.0%0.5%1.5%3.2%3.3%2.1%4.0%3.5%3.0%2.8%3.3%O Reilly AutomotiveORLY4.8%0.8%1.7%1.8%1.3%1.4%3.4%4.6%3.9%3.3%3.8%4.0%4.0%4.0%4.

43、0%4.0%Auto Parts Average ex. MNRO1.3%(0.6)%1.1%0.4%0.5%0.4%0.9%2.8%3.6%3.2%2.6%3.0%2.6%2.8%2.7%2.8%Auto Parts Average0.5%(1.0)%1.1%0.3%0.2%0.2%0.7%2.4%3.2%2.9%2.3%3.0%2.6%2.9%2.8%2.8%Census(0.1)%(0.5)%(0.3)%(0.4)%(0.2)%1.6%3.0%0.9%Best Buy Co. Inc.BBY0.3%1.6%5.4%4.4%9.0%5.6%7.1%6.2%4.3%3.0%4.8%1.8%1

44、.4%2.2%1.8%1.8%Best Buy (Domestic)BBY0.2%1.4%5.4%4.5%9.0%5.6%7.0%6.0%4.3%3.0%4.8%1.8%1.4%2.2%1.8%1.8%Census(2.7)%(3.6)%(2.1)%2.8%1.3%3.2%2.4%Costco (reported SSS) (1)COST1.0%5.0%6.1%10.5%8.4%7.5%10.2%9.5%8.8%5.4%8.5%1.9%2.0%2.0%2.0%2.0%U.S. Costco0.8%5.0%5.8%8.7%5.7%6.3%7.8%7.8%8.3%Costco Core2.8%5.

45、0%5.7%7.9%5.4%6.0%7.0%7.2%7.5%BJs Wholesale ClubBJ(2.3)%(4.5)%(0.9)%0.4%1.2%(0.9)%2.0%2.0%1.9%2.9%2.2%1.8%2.0%2.0%2.0%2.0%TargetTGT0.0%(1.3)%1.3%0.9%3.6%1.3%3.0%6.5%5.1%5.3%5.0%4.4%3.6%2.8%3.3%3.5%Walmart U.S.WMT1.4%1.4%1.8%2.7%2.6%2.1%2.2%4.5%3.4%4.2%3.6%3.8%2.5%2.5%2.5%2.8%Sams ClubWMT 1.1% 1.1%1.

46、2%2.8%2.4%2.0% 3.8%5.0%3.2%3.3%3.8% 2.5%1.5%1.0%1.0%1.5%Discounters Average0.7%1.4%2.7%4.4%3.9%3.5%4.7%5.5%5.0%3.8%4.2%2.7%2.3%2.1%2.1%2.3%Census0.9%1.6%3.9%3.6%2.2%3.2%4.2%3.4%3.7%Bed Bath & BeyondBBBY(0.6)%(2.0)%(2.6)%(0.3)%(0.6)%(1.3)%(0.6)%(0.6)%(1.8)%(1.1)%(1.0)%(1.1)%(1.0)%(1.0)%(1.0)%(1.0)%Mi

47、chaelsMIK(0.5)%(1.2)%0.6%1.0%2.5%1.0%0.4%(0.4)%3.8%(0.4)%0.8%0.0%1.0%0.0%1.0%0.5%Pier 1 ImportsPIR(1.0)%(0.2)%1.8%(0.7)%(7.5)%(2.0)%(8.2)%(11.4)%(3.5)%2.0%(10.7)%2.0%3.0%3.0%2.0%(2.4)%RH IncRH(7.0)%9.0%7.0%6.0%2.0%5.8%1.0%5.0%4.0%4.8%3.8%5.8%4.3%5.1%5.3%5.1%Wayfair 2W53.9%24.6%39.0%36.1%43.0%36.2%41

48、.6%43.0%41.2%35.0%39.9%36.5%23.0%27.1%26.2%27.8%Williams SonomaWSM 0.7% 0.1%2.8%3.3%5.4%3.2%5.5%4.6%3.1%2.4%3.7%2.1%3.0%4.1%4.0%3.4%Home Furnishings Average(0.8)%(1.0)%0.7%0.9%2.5%0.9%3.2%1.8%0.2%1.2%1.5%(0.0)%1.1%1.4%1.5%1.0%Census5.6%5.5%5.2%6.8%5.2%4.5%2.6%Home Depot (US)HD6.2%6.0%6.6%7.7%7.2%6.9

49、%3.9%8.1%5.4%3.7%5.4%5.2%3.0%5.2%5.8%4.7%Lowes (US)LOW4.2%1.9%4.5%5.7%4.1%4.1%0.5%5.3%2.0%2.4%2.6%5.0%2.0%2.5%2.5%3.0%Home Improvement Average5.2%4.0%5.6%6.7%5.7%5.5%2.2%6.7%3.7%3.1%4.0%5.1%2.5%3.9%4.2%3.9%Census6.6%8.0%10.0%7.6%3.6%4.4%3.1%Floor & DecorFND19.4%12.8%14.7%13.5%24.4%16.7%15.6%11.4%11.

50、1%0.5%9.5%4.0%6.5%7.3%7.3%6.3%Lumber LiquidatorsLL(4.8)%5.0%5.9%3.8%4.5%5.4%2.9%4.7%2.1%(1.6)%0.8%0.3%1.6%2.7%2.0%2.2%The Tile ShopTTS 7.6% 0.7%5.5%1.1%(4.9)%0.5% (6.8)%(1.8)%2.1%5.0%(0.6)% 2.5%3.5%3.5%3.5%0.8%Tractor SupplyTSCO1.7%(2.2)%2.2%6.6%4.0%2.8%3.7%5.6%5.1%5.7%5.1%4.5%2.8%3.0%2.5%3.1%Party

51、CityPRTY(0.4)%1.7%0.1%(2.6)%(1.4)%(0.7)%2.4%0.1%(1.0)%(2.9)%(0.7)%(1.5)%0.5%1.0%1.5%0.6%DicksDKS3.6%2.4%0.1%(0.9)%(2.0)%(0.3)%(2.5)%(4.0)%(3.9)%(2.2)%(3.1)%(0.7)%0.1%1.0%2.7%0.9%Census: Sporting Goods(3.8)%(6.6)%(2.2)%(3.1)%(1.9)%(2.4)%(2.8)%ULTA BeautyULTA15.8%14.3%11.7%10.3%8.8%11.0%8.1%6.5%7.8%9.

52、4%8.1%7.0%7.0%6.5%6.0%6.6%Nielsen Data(0.4)%(0.6)%(0.5)%1.8%1.9%1.7%2.6%Source: Company reports, Bloomberg, and J.P. Morgan estimates. Estimates for non-covered companies (MNRO, PIR, LL, TTS) are from Bloomberg.Holiday Season Disappoints Across the BoardAs seen below, overall retail sales (all categ

53、ories, not just “core”) slowed sharply in 4Q vs. the year. Implied in the annual numbers below is the acceleration in early 2017, peak in the holiday, and then slowdown in late 2018.2015201620172018%4Q183.0%2.8%4.24.9%4.5%4.7%4.34.7%4.2%4.33.7%2.9%4.23.8%2.6%5.0%0%4.4.9%4.2%4.8%4.5%2014Retail Sales

54、ex-gasRetail SalesPCE ex-gasPCEConsumer Data:4.5%4.6%4.9%Figure 4: Personal Consumption and Retail Sales GrowthSource: Bureau of Economic Analysis and Census Bureau.It is also interesting to note that PCE didnt see the same deceleration, which implies a share of wallet shift back towards services (a

55、 reversal of last year). Indeed, as seen below, the growth rate of services accelerated 29 bps in 4Q18, while goods purchased slowed a whopping 130 bps driven by motor vehicle & parts dealers (-195 bps), furnishings & durable household equipment (-192 bps), and food & beverages (i.e., grocery, -101

56、bps).Figure 5: 4Q Saw Deceleration in SpendingDurable GoodsMotor Vehiclesand PartsPCE Goods Furnishings& Durable HouseholdEquipmentNondurable Goods ex- GasolineFood & Beverages PurchasedClothing and FootwearTotal Goods1Q18-3Q184Q18Growth acceleration4.81%3.51%-130 bps2.24%0.29%-195 bps5.38%3.46%-192

57、 bps3.76%3.67%-10 bps3.93%2.93%-101 bps3.91%4.12%+21 bps4.81%3.51%-130 bpsHousing andUtilitiesPCE ServicesTransportati Food Services & Health Care on Services AccommodationsFinancial Services & InsuranceOther ServicesTotal Services1Q18-3Q184Q184.61%4.47%4.57%4.65%4.36%2.41%4.88%5.45%6.32%5.12%4.32%5

58、.75%4.77%5.06%Growth acceleration-14 bps+7 bps-195 bps+57 bps-120 bps+142 bps+29 bpsSource: U.S. Census Bureau, BLS, and J.P. Morgan estimates.Holiday sales grew only 2.3% YoY (vs. 5.9% in 2017), making it the most tepid season since 2009. The categories that showed the biggest improvement in 2017 l

59、ed the way back down as a “flush” consumer then turned more cautious (and even fearful when the market melted). Indeed, with the exception of home improvement (+51 bps), all of the key retail categories we track saw their 4Q sales growth decelerate sharply: sporting goods (-601 bps), home furnishing

60、s(-516 bps), consumer electronics (-393 bps), non-store (-222 bps), and apparel (-210 bps).Figure 6: 4Q Retail Sales DeceleratedTotal Retail SalesHome ImprovementAuto Parts & AccessoriesFood & BeverageGeneral MerchandiseRestaurantsClothing & AccessoryNon-Store RetailersElectronics & AppliancesHome F