Online Retailers Hit 52-Week Highs As Same-Store Sales Collapse

By Douglas A. McIntyre Published Sep 30, 12:27PM EDT

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Online retailer Amazon (AMZN) hit a 52-week high last week. So did Priceline (PCLN), Expedia (EXPE), and eBay (EBAY). Even Overstock (OSTK) made the list.

On the 52-week low side of the ledger, Wall St. found Sear Holdings (SHLD), Circuit City (CC), Staples (SPLS), and Borders (BGP). Same store sales for last month were disappointing for most retailers.

The rotation toward buying online seems to have come to pass. And, if bricks-and-mortar retailers want to know where their business went, they can blame it on a slow economy and high gas prices. Or, they can admit that a huge amount of their business is going online.

Part of the trend is driven by convenience, but another important aspect is that shoppers can get reviews and ratings of products online before they buy. According to a recent study by iCrossing, "About 49 percent of those surveyed said they look for customer product reviews and evaluations, up from 40 percent two years ago." It’s much harder to get a review in a store.

Forrester Research expects US online sales to hit $157 billion this year. The figures should rise to $272 billion by 2001, which would make it a little under 10% of total retail sales.

Although a number of large retailers like Wal-Mart (WMT) have large and well-trafficked sites, the movement online is going to continue to do significant damage to store traffic.

That means the companies like Home Depot (HD), Best Buy (BBY), and CostCo (COST) better start pushing the opportunity to buy at their websites harder and start looking at closing under-performing stores. And, that is likely the path which the most intelligent retailers will take over the next two or three years. Measuring store sales and attrition by location may well allow some of these companies to prune their number of locations. But, they have to get those customers to stay with them online.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.