RetailSails

August ended with a whimper for retailers. For the third consecutive week, both ICSC and Redbook reported year-over-year declines in U.S. Chain Store Sales as back-to-school season failed to spur demand:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales decreased 0.7% in the last week of August vs. a year ago, while same-store decreased 0.5% on a week-over week-basis. Commenting on the results, ICSC chief economist Michael P. Niemira said “Although the back-to-school calendar shifts will, on balance, boost year-over-year sales in August a tad, there was little discernible improvement in the trend during the entire month otherwise,” ICSC expects total sales for the month of August will be down between 3.5 to 4 percent.
• Redbook Research reported that retail same-store sales for the week ending Aug 29th declined 4.1% compared to the year-ago period, while sales for the first four weeks of August were down 0.6% from the same period last month, and 4.3% lower than last year. The firm added that consumer interest last week was on seasonal and back-to-school merchandise. It added that the sales declines are expected to continue, with preliminary targets for September of down 4% from last year and 1.5% from August. 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.

By all accounts, back-to-school spending has so far been disappointing for most retailers. Early promotions, state tax holidays, and a late Labor Day were not enough to lure shoppers into increasing their spending in the month of August. Barring a last-minute splurge by consumers, don’t expect to see much improvement in September. We should start to see retailers improve their year-over-year figures starting in October, as most companies will be dealing with extremely weak comparable sales from last fall.