High gas prices fuel e-commerce

Those who cannot drive are going online. Cruising to the mall, if it is 20 or 30 miles away, is no longer a cheap trip. With gas at $4 a gallon, some potential shoppers may not go to the mall at all.

Thank goodness for the internet. More and more people are getting online to buy the things they need. In an economy where many people feel poor, the average online shopper may not be spending big, but he is spending.

According to The New York Times, retailers "are experiencing double-digit sales growth at their shopping Web sites, creating a surprising bright spot during an otherwise gloomy time for sales in brick-and-mortar stores." The paper adds that Gap (NYSE: GPS) "had an 11 percent decline in same-store sales in the first quarter, but a 21 percent increase in online sales."

While the news is a silver lining, it probably does little to save the earnings of large retailers. Internet sales are still a relatively small portion of total revenue for companies that have to support the real estate and personnel costs at significant numbers of large stores. E-commerce traffic may lift numbers a bit, but they do not bring down the expense base that represents most of the problem for retail profitability.

Until the internet sales are 15% or 20% of total sales for a company like Gap, investors should not look at online revenue as a reason to buy retail stocks.

Douglas A. McIntyre is an editor at 247wallst.com.