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Tracking Performance of Brick-and-Mortar Retail

The spate of bankruptcies from brick-and-mortar retails stores could be spooking investors as companies like Sears Holdings filed for bankruptcy protection last month after 125 years in business. The retail store is expected to shutter 142 stores by the end of the year with liquidation sales expected to begin shortly.

One way for investors to track the performance of brick-and-mortar stores for comparison purposes to their online counterparts is the Solactive-ProShares Brick and Mortar Retail Store Index. The index itself is composed of listed companies traded on U.S. stock exchanges that meet the following criteria:

  • A market capitalization of more than $500 million as of the selection date and Average Daily Traded Value of more than $1 million in the 6-month period prior to the selection date;
  • 50% of revenues for the previous fiscal year from retail operations
  • More than 75% of revenues from retail operations for the previous fiscal year from in-store sales.

“Year-to-date Brick and Mortar retailers have narrowly underperformed, returning 7.2% to 10.4% for Online Retail, though indicators like corporate earnings and retail sales figures continue to show the falling share of physical stores as more consumer shift their shopping online,” ProShares noted in an email.

Bet on Black Friday to Boost Retail ETFs 2Even with the latest closures occurring in the age-old brick-and-mortar retail businesses, these same companies are expanding their internet presence to enhance their online retail experience.

“The traditional division between online and in-store retailing continues to shift and blur,” Marshal Cohen, NPD Group’s chief industry advisor, said in a statement. “Traditional store retailers are upping their online games these days, while they are also finding ways to drive traffic to stores with improved efficiency, more entertaining shopping experiences and better value. Online retailers are also finding ways to blur the retail divide in their own ways, offering lower prices and shipping options that get products to consumers faster than ever.”

For more information on the consumer sector, visit our consumer discretionary category.