U.S. Chain Store Sales continue to be weak, with both ICSC and Redbook reporting declines in year-over-year figures this morning:
- The International Council of Shopping Centers (ICSC) reported that comparable same-store sales decreased 0.2% in the 3rd week of August vs. a year ago, while same-store increased 0.6% on a week-over week-basis. “Sales continued to bounce around on a weekly basis with this period’s performance showing an improvement over the latest week, which offset some of the prior week’s dip,” said Michael P. Niemira, ICSC chief economist. “With national temperatures warmer than average and a heat wave in the Northeast, sales of fans and air conditioners were boosted–helping to drive customer traffic for discounters, in particular. Overall sales for August continue to face headwinds and with that ICSC Research continues to expect the month’s performance will be down between 3.5 to 4 percent,” Niemira added.
- Redbook Research reported that retail same-store sales for the week ending Aug 22nd declined 4.4% compared to the year-ago period, while sales for the first three weeks of August were down 0.7% from the same period last month, and 4.4% lower than last year. The firm added that cash-for-clunkers pulled sales from the back-to-school season, and said apparel retailers are reporting back-to-school trouble. Redbook sees a 0.7 percent full month decline compared to July. 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.
With most retailers having reported 2nd quarter earnings by now, over 90% of companies have beat analyst estimates. Though sales remained very weak, most companies were able to surprise on the upside with cost reductions and inventory management. However, based on comments made on quarterly conference calls, we don’t expect much demand improvement in the third quarter. Companies will be hard-pressed to be able to continue to find cost reductions, and inventories have already been slashed to be more in line with sales trends. Unless they are able to improve top-line results soon, profitability will start to suffer.
| Week Ending | Index(1977=100) | YoY Change | WoW Change |
|---|---|---|---|
| Aug 22 | 493.8 | -0.2% | 0.6% |
| Aug 15 | 491.0 | -0.6% | -0.9% |
| Aug 8 | 495.6 | 0.4% | 0.0% |
| Aug 1 | 495.5 | -0.7% | -0.2% |
| July 25 | 496.5 | -0.5% | 1.0% |
| July 18 | 491.7 | -0.3% | 0.5% |
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*Source: ICSC-Goldman Sachs Index |
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| Week Ending | Week YoY Chg | MTD MoM Chg | MTD YoY Chg |
|---|---|---|---|
| Aug 22 | -4.4% | -0.7% | -4.4% |
| Aug 15 | -4.5% | -0.7% | -4.4% |
| Aug 8 | -4.2% | -0.5% | -4.2% |
| Aug 1 | -5.4% | -1.6% | -5.6% |
| July 25 | -5.5% | -1.6% | -5.6% |
| July 18 | -5.8% | -1.7% | -5.7% |
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*Source: Johnson Redbook Index |
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