In previous pricing posts, there has been much discussion concerning increasing retail discounting and other forms of increasing pricing pressures.
A critical issue is what the cumulative impact on retail profitability this discounting had in 1Q 2014 results.
A Wall Street Journal Real-Time Economics post of June 16, 2014, titled “Cold Weather Shrinks First-Quarter Retail Profits Despite Sales Gain” discusses the issue of larger retailers’ first quarter profitability.
A couple of excerpts:
After-tax profits for U.S. retailers with more than $50 million in assets fell 11.5% in the first quarter, compared with a year earlier, even as sales grew 3.6%, a Commerce Department report said Monday.
In the first quarter, large retailers recorded a $14.6 billion after-tax profit on $625.9 billion in sales. The decline in first-quarter profits was the largest since 2009, at the tail end of the recession.
The article also discusses reasons for this reduced profitability.
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