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The shoppers are back. The shoppers are back.

OK, but what about profits?

The Crowds Returned, Retail Profits Didn't.

“It’s a good start to the holiday shopping season,” Macy’s Inc. Chief Executive Jeff Gennette said in an interview Friday. “It started early online and when the stores opened yesterday evening, we saw strong traffic and people are buying.”

But despite the crowded malls and shopping carts loaded with everything from Christmas pajamas to Samsung televisions, retail profits aren’t keeping pace with the sales gains. Chains from Macy’s to Walmart Inc. are struggling with rising costs as more shopping shifts online.

“We are in a decade of profitless sales,” said Paul Lejuez, a Citi retail analyst. “Even though sales are better, a lot of the structural issues that have weighed on the industry haven’t gone away.”

The crowds may have returned on Black Friday, but check out the rest of the year.

Monthly Retail Foot Traffic

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Note the scale. Those are negative numbers, just less negative than a year ago.

Sears Last Black Friday

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Empty shelves and sad shoppers at Last Black Friday at a Sears Store.

Instead of door busters, shoppers find a mess; ‘I came here for years and years and all of a sudden they’re closing’ said one shopper.

Many remaining products were being discounted by 75% or 80%. “They might as well give it to me for free,” said another.

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The company sold the best thing it had in an attempt to stay in business: Craftsman tools.

Last week, Retailers Hammered by Profit Concerns: Target fell 10%, and Kohl's 8%.

Expect more retail store closings.

Mike "Mish" Shedlock