Why Would Anyone Invest in Retail Stocks?

Reasons why I cannot see investing in retail stocks.

1) Aging population - the Baby Boomers are now hitting age 65.  It is a fact that old folks buy less of everything except for health care and booze.

2) Population growth is slowing - A good part of past population growth was immigration.  However in the past year, 1 million illegal immigrants returned home and legal immigration is down as well.  The traditional industries such as construction are far from hitting bottom.  These shoppers are not coming back.

3) Household debt - It is at record highs.  Consumers must now pay off the purchases they made during the "good times" rather than buy more stuff today or in the foreseeable future.

4) Credit card interest rates - "Zombie" banks (pretty much all of them) have raised interest rates to as much as 30% as well as hiking many of their fees.  While American consumers have a hard time fighting off their desire for immediate gratification, slowly they are realizing that buying goods with credit cards is a bad deal.  Even for those who will never get it, the compounded interest costs at higher rates of interest will eat up available credit limits rather quickly.

5) Job losses and labor market participation - Not only is unemployment at 10% but another 5% or so have just given up.  There is little indication that these jobs will be coming back for a very long time.  In fact we have yet to reach the point where job losses will stop.  No work, no purchases.

6)  Future tax increases - We all know that we cannot continually run $1.5 trillion dollar deficits.  Taxes will have to be raised or government jobs & purchases cut.  Either way, there will be less spent on retail.  Many are discussing a VAT tax which basically a national sales taxe.  Further, most or all of the Bush Era tax cuts will be allowed to expire and when they do, so will discretionary income levels.

7)  Higher import costs for Chinese goods.  Believe it or not, China is experiencing a labor shortage at its coastal factories.  Wages are expected to rise at least 10% after the Spring Holiday (which just ended).  Further, in spite of their rhetoric against it, China is actively considering increasing the value of their currency, perhaps with a 5% jump and then many smaller increases there after.  Thus the cost of many of the goods sold by retailers will be higher and profit margins lower (unless they raise prices, but this will reduce total sales).

8)  Discretionary income is falling - Due to globalization and the "Great Recession", employees are not able to demand higher wages and thus "real wages" are not keeping up with inflation.  Most consumers have a number of fixed costs that go up with inflation or cannot be adjusted.  Thus lower wages means lower discretionary income means fewer purchases.

9) Oil and gas prices may continue to rise - Gasoline is a major cost for many consumers.  China, the rest of Asia, India, Brazil and even Russia are rebounding out of recession and the pick up in their economies and increased auto sales are resulting in strong demand and higher prices for oil.  Every additional dollar spent to fill up the tank means one less dollar available to buy stuff.  Higher gasoline prices are likely to become a permanent fixture even if demand in the USA falls off.

So my question to you is, "How can retailers grow rapidly, let alone grow at all, when faced with these headwinds over the next few years and perhaps beyond?

So what are your counter arguments?

What am I missing?