RetailSails

U.S. Chain Store Sales continue to be weak, with both ICSC and Redbook reporting year-over-year declines this morning for the final week of July:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales for large chain stores fell by 0.7% in the final week of July vs a year ago, while same-store sales decreased 0.2% on a week-over week-basis. ICSC expects same-store sales for July to be down about 5.5 percent with leaner clearance than last year hurting the reported sales pace. Commenting on the results, ICSC chief economist Michael P. Niemira said “Sales gave back a little over the last week as the later back-to-school state sales tax holiday dates trimmed the year-over-year sales comparison a tad, but will tend to lift sales in the current week. July sales are likely to be weak due to sharp markdowns on clearance items and, in some cases, more limited inventory to clear, as well as cooler than normal weather for the month that pared seasonal demand.”
• Redbook Research reported that retail same-store sales for the week ending Aug 1st declined 5.4% compared to the year-ago period, while sales for the first 4 weeks of July were down 1.6% from the same period last month, and down 5.6% from last year. The firm added that some retailers saw somewhat firmer sales toward this past weekend, and sales of electronics are expected to grow due to back-to-school demand. Note that Wal-Mart stopped reporting weekly and monthly sales figures in May of this year, and the substantial impact they had on the index is evident in the graph below.

We will have to wait until Thursday to see the final tally, as over 30 retailers will be reporting monthly sales results. However, it appears July was another weak month for retailers. With unseasonably cool weather and Labor Day falling a week later than last year, there will likely be little boost from back-to-school shopping in the results. Overall, we expect same-store sales were down 5-5.5% for the month, similar to slightly worse than June results. As July is the end of the 2nd fiscal quarter for many retailers, they will be updating outlooks for the rest of the year, and don’t be surprised to see retailers lowering guidance.