RetailSails

Today’s weekly chain store sales reports provided a glimmer of hope that brighter days might lay ahead for retailers, as both the ICSC and Redbook Indexes continue to show improvement:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales increased 1.6% in the 2nd week of September vs. a year ago, while same-store sales were flat on a week-over week-basis. Though this was the largest YoY gain for the index since the 1st week of September ‘08, there were several mitigating factors. “Sales were unchanged from the prior week, but jumped from the prior year – in part due to easier comparisons, calendar and base-year effects, mild weather and slightly better demand,” said Michael P. Niemira, ICSC’s chief economist. “With easier sales comparisons in September, the industry should see overall improvement. However, ICSC Research expects sales will be down about 2 percent from its year-ago level,” Niemira added.

• Redbook Research reported that retail same-store sales for the week ending September 12th declined 1.9% compared to the year-ago period, while month-to-date sales rose 0.5% from the same period last month, and are down 2.1% compared to the same period last year. “Most retailers reported a positive Labor Day holiday, with improved sales growth on Sunday and Monday,” said Catlin Levis, Redbook analyst. “Thereafter, business tailed off sharply in the middle of the week, only to build up again into the weekend and was sufficient to leave our model ahead of plan month-to-date.” 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.

The Census Bureau also provided some evidence this morning that consumers might be loosening the hold on their wallets, reporting that Retail Sales for August were up 2.7% from the prior month. While the government’s cash for clunkers program was responsible for a large part of that, the monthly gain excluding autos was still a robust 1.1%.

However, after seeing weak August same-store sales results for the individual companies that reported earlier in September, we suspect seasonal adjustments played a large role in this month’s strength. We will be examining the government’s report in more detail shortly.