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CNBC reports that even "with the S&P Retail Index down nearly 30% this year, most of the industry is boosting investment in capital spending by double digits, including industry leaders Walmart and Among the top tier, only struggling clothier Gap and home-improvement chain Lowe’s are cutting back significantly. At electronics retailer Best Buy, first-half profits fell by more than half – but investment rose 37 percent."

The rationale is that "investments made by big-spending leaders like Walmart, Amazon and Home Depot are likely to result in taking customers from weaker rivals next year, when consumer discretionary cash flow is forecast to rebound from a year-long 2022 drought and revive shopping after spending on goods actually shrank early this year."

There's a historical precedent cited in the story:  "After the 2007-2009 downturn, 60 companies Gartner classified as “efficient growth companies” that invested through the crisis saw earnings double between 2009 and  2015, while other companies’ profits barely changed, according to a 2019 report on 1,200 U.S. and European firms."

CNBC also notes that Amazon appears to be the biggest spender of them all, even though it is cutting back and shifting some of its spending.

KC's View:

The argument here long has been that retailers have to resist the impulse to "go back to fundamentals" in times like these.  First of all, if you're not doing the fundamentals right already, it probably is too late.  And second, this is a perfect time to invest in innovations that will propel one past competitors who are tapping the breaks.

The investments will be different depending on size and resources, but the mindset has to be to hit the accelerator, and gain market share that will pay off when the economy improves.