B.I.G.

Tips 1/14/10

Bespoke Investment Group

Retail Sales: Finally, a Gain!
Y/Y Retail Sales (Inflation Adj.) vs Consumer Discret Sector
After taking into account upward revisions in Two positive readings in a row.
8 350
the November figures, retail sales for Decem-

Y/Y Retail Sales Inflation Adjusted (%)

6

Consumer Discretionary Sector

ber came in considerably weaker than ex- 4
2
300

pected. While economists were forecasting a 0 250

-2
gain of 0.5%, the headline number showed a -4 200
decline of 0.3%. However, on a year/year in- -6
-8 150
flation adjusted basis, retail sales actually in- -10
creased (3.4%) for the second straight month. -12 100
'93 '95 '97 '99 '01 '03 '05 '07 '09
We would note, however, that if January Y/Y Retail Sales Adjusted for Inflation Consumer Discretionary Sector

shows a similar decline to December, the y/y Actual Forecast

change may find itself back in negative terri- Retail Sales (m/m) -0.3 0.5
tory once again. Retail Sales Ex Autos -0.2 0.3

As one would surmise from the recent per- Retail Sales By Category (% of Total Sales) 1-Yr Change
formance in auto related stocks like Ford (F), Category Current One Year Ago Change
the motor vehicles sector saw the third larg- Motor Vehicle and Parts Dealers 16.84 16.74 0.10
General Merchandise 14.15 14.61 -0.46
est increase in total share of retail sales this Food and Beverage Stores 14.04 14.40 -0.36
month relative to a year ago. Other sectors Bars and Restaurants 10.75 11.21 -0.46
Gas Stations 9.79 7.72 2.07
seeing the largest increases were nonstore Nonstore Retailers 7.30 6.97 0.33
retailers (internet) and Gas Stations. On the Building Materials 6.61 7.40 -0.78
downside, sectors seeing the largest decrease Health and Personal Care 6.15 6.16 -0.02
Clothing 4.95 4.96 -0.02
in total share of retail sales include building Miscellaneous 2.73 2.76 -0.03
materials, general merchandise, and bars and Electronics & Appliances 2.39 2.54 -0.15
Furniture 2.20 2.41 -0.21
restaurants. Sporting Goods 2.10 2.11 -0.02

While this month’s retail sales report showed an Retail Sales By Category: One Month Chg. (%)
overall decline, several sectors managed to see Category One Month Change (%)
growth during the month. Of the 13 sectors shown, Sporting Goods 1.65 %
Nonstore Retailers 1.43
five saw monthly increases in sales while eight saw Gas Stations 1.04
declines. One of the notable risers was nonstore re- Health and Personal Care 0.82
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Furniture 0.27
tailers which saw their fourth straight monthly in-
Total Retail Sales -0.27
crease of 1% or more. That group hasn’t seen four Building Materials -0.36
straight increases of 1% or more since September Bars and Restaurants -0.57
Clothing -0.64
2004. Food and Beverage Stores -0.77
General Merchandise -0.78
Please see pages two and three for long-term charts Autos and Parts Dealers -0.81
of each category’s percentage of total retail sales. Miscellaneous -1.00
Electronics & Appliances -2.59

Page 1 of 3 © Copyright 2010, Bespoke Investment Group, LLC. Bespoke Investment

Group, LLC believes all information contained in this report to be accurate,
but we do not guarantee its accuracy. None of the information in this re-
port or any opinions expressed constitutes a solicitation of the purchase or
sale of any securities or commodities.
 B.I.G. Tips 1/14/10

Bespoke Investment Group

Bars & Restaurants Building Materials
11.3 8.5

10.8 8.0

10.3 7.5

9.8 7.0

9.3 6.5

8.8 6.0
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Clothing Electronics and Appliances

6.0 2.8

2.6
5.5

2.4

5.0
2.2

4.5 2.0
'93 '95 '97 '99 '01 '03 '05 '07 '09 '93 '95 '97 '99 '01 '03 '05 '07 '09

Food and Beverage Stores Furniture

19.0 2.9

18.0 2.8

2.7
17.0
2.6
16.0
2.5
15.0
2.4
14.0
2.3
13.0 2.2

12.0 2.1
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In the charts above and on the following page, we highlight the total share (on a percentage
basis) of retail sales that each category makes up on a monthly basis since 1992. Some of the
noteworthy trends include:
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 After a parabolic increase through the beginning of 2009, bars and restaurants are seeing
their total share of sales decline by almost as fast a pace.
 The housing sector remains weak as building materials has seen its total share of retail
sales decline to its lowest level in over 15 years. Furniture seen even weaker trends in its
sales as that sector’s share of total sales is at historical lows.
 In 2008, gas stations saw their share of sales increase to nearly 12% of total sales, before
crashing back to earth. If this trend continues, the consumer may once again find them-
selves under considerable pressure.
 Non store retailers were helped by a snowy December across the US, and the sector has
seen four straight months of 1%+ monthly increases in sales.
Page 2 of 3 © Copyright 2010, Bespoke Investment Group, LLC. Bespoke Investment
Group, LLC believes all information contained in this report to be accurate,
but we do not guarantee its accuracy. None of the information in this re-
port or any opinions expressed constitutes a solicitation of the purchase or
sale of any securities or commodities.
 B.I.G. Tips 1/14/10

Bespoke Investment Group

Gas Stations General Merchandise
12.0 15.0

11.0 14.5

14.0
10.0
13.5
9.0
13.0
8.0
12.5

7.0 12.0

6.0 11.5
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Health and Personal Care Miscellaneous

6.4 3.6
6.2
6.0 3.4
5.8
5.6 3.2
5.4
5.2 3.0
5.0
4.8 2.8
4.6
4.4 2.6
4.2
4.0 2.4
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Motor Vehicles and Parts Non Store Retailers

7.5
26.0
7.0

24.0 6.5

6.0
22.0
5.5

20.0 5.0

4.5
18.0
4.0

16.0 3.5
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Sporting Goods
2.6

2.5
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2.4

2.3

2.2

2.1

2.0

1.9
'93 '95 '97 '99 '01 '03 '05 '07 '09

Page 3 of 3 © Copyright 2010, Bespoke Investment Group, LLC. Bespoke Investment

Group, LLC believes all information contained in this report to be accurate,
but we do not guarantee its accuracy. None of the information in this re-
port or any opinions expressed constitutes a solicitation of the purchase or
sale of any securities or commodities.