Amazon > Costco

Costco Has Some Work to Do

Amazon (Getting its Own Category). As this point, Amazon merely needs to hint that it may enter a vertical and market caps will get sliced by 30%. It doesn't matter whether that's logistics (see UPS and Fedex) or pharma. The idea that Amazon Prime will affect wholesale retailers like Costco? Well, Costco's CEO said, "As it relates to the publicity and the news and the noise around Amazon and Whole Foods, all we can do is perform." That's not a confidence-inspiring answer by any stretch of the imagination. And the market reacted by sending shares down nearly 10%. Why? Membership renewals and margins were down. Revenue? Up. Net income? Up. That's what makes this market move so intriguing. The report actually wasn't terrible. But Amazon!

Alternative Use Cases for Malls ($UPS, $RNP)

There's a lot of talk about alternative use cases for vacant retail space. Here's what is happening with some empty Sports Authority locations. Some other new use cases are floated here. Sure, sky-diving in a mall sounds amazing, right? I mean if something were to go wrong, at least you'll go splat on some hard floor where some trinket used to be sold rather than over some lake in New Zealand. So extreme, brah. Given all of the trends - exacerbated by the reportedly imminent bankruptcy of Gymboree (1300 stores) - certain investors like Cohen & Steers ($RNP) are staying away. Some commentators, however, think all of this talk about the "retail apocalypse" is just fear-mongering. Regardless where you come out on this, e-commerce is on the rise and all of it is, counter-intuitively, hurting others outside of retail too, including UPS ($UPS), which is experiencing rising costs to handle all of the deliveries - costs that it may attempt to pass back to the retailers.