Strange Story at Rent A Center (Are Gas Prices Really THAT High?)

Implications: We’ve heard this story before. Two years ago when store performance was suffering, it was fuel cost. Here we go again. Demand drops and energy costs are to blame. Does anyone wonder what the real story is here? Could there be more to it than higher prices at the pump? Besides, gas is only a few percentage points higher right now than it was last summer.

Analysis: I have an idea that customers just don’t like what Rent A Center is selling. The stores are small, there’s a high percentage of used product in them, and the prices are too high. Demand seems just fine to me. Yes, July was a relatively weak month, but the calendar set up poorly and anyone who’s been in rent to own for any amount of time knows about seasonal weakness and the importance of the calendar, and would have easily predicted what kind of month July would be. August and September look good. There’s more going on here than gas.