RetailSails

U.S. Chain Store Sales showed some improvement this past week, with both ICSC and Redbook reporting improvements in year-over-year figures this morning:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales increased by 0.4% in the 1st week of August vs. a year ago, while same-store sales were flat on a week-over week-basis. This is the first positive year-over-year change since the last week of June. Commenting on the results, ICSC chief economist Michael P. Niemira said “sales were helped by the confluence of the later back-to-school starts and the 10 states that had later and non-comparable state sales tax holiday periods compared with last year. The sales performance should improve as comparisons begin to get easier and the economy is showing signs of recovery.” ICSC forecast August comparable sales to decline 3.5% to 4%.”
• Redbook Research reported that retail same-store sales for the week ending Aug 8th declined 4.2% compared to the year-ago period, while sales for the first week of July were down 0.5% from the same period last month. The firm added that shoppers were focused on clearance sales and were starting to look at new back-to-school merchandise. Most stores are in transition between summer clearance and back-to-school sales, and the summer clearances are being priced less aggressively than usual because of leaner inventories. 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.

This week we saw the first signs of life in weekly retail sales since the end of June. Twelve states have now held back-to-school tax holidays, and 3 additional states will have exemptions during the weekend of August 21st, which should provide a marginal boost. Overall same-store sales for August should show some improvement from the previous months, with expectations of a roughly 4% YoY decline. The Commerce Department will be releasing retail sales figures for July on Thursday morning, and the market expects a 0.7% increase from the prior month, or a 0.1% increase excluding automobiles. Cash for clunkers is expected to provide a boost to auto sales, and gasoline sales should help prop up results once again. However, all eyes will be more focused on retail earnings, with a large number of retailers expected to report 2nd quarter results throughout this week.

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.