RetailSails

Chain store sales continued to slow in the last week of May, as the 8th consecutive weekly decline in gas prices and warmer temperatures were not enough to entice discretionary spending. Shoppers still haven’t resumed the pace from the early spring buying spree, suggesting unseasonably warm winter and early spring weather, as well as a much earlier Easter, pulled sales forward and robust spending to start the year wasn’t as strong as it first appeared.


▪ The International Council of Shopping Centers (ICSC) reported that chain store sales fell 0.5% from the prior week, the fifth consecutive decline and and 6th drop in the last 7 weeks, while increasing 2.9% over the prior-year period during the week ending May 26th. Michael Niemira, ICSC’s vice president of research and chief economist, said “Consumers have been more pessimistic on many fronts during the month of May as the financial worries in Europe clearly have spilled over and weakened consumer confidence in the U.S. as the U.S. financial markets have retreated as well on increased global worry.” However, the ICSC‐GS consumer tracking survey suggested that consumers shopped more over the past week and some of the improved business went to discounters. According to Weather Trends International (WTI), the national average temperature over the past week ending Saturday was 2.2°F warmer than last year and 3.6°F warmer than its long‐term average. Meanwhile, fuel prices had their eighth straight weekly pullback.

▪ Redbook Research said that same-store sales increased 3.2% for the final week of May following a 2.7% gain in the prior week. Month-to-date, sales increased 3.0% over the prior year and fell 0.9% relative to April. Redbook said sales were lifted by holiday traffic and promotions in the run-up to Memorial Day, and the month finished slightly above target. Redbook analyst Caitlin Levis said “Certain retailers reported strength in merchandise related to school graduations such as women’s wear, men’s wear, footwear and women’s accessories.” She added “Seasonal demand is expected to continue to drive business through June, but will likely moderate somewhat in July, which is a the transitional month ahead of fall restocking and the back-to-school period.”

▪ ShopperTrak reported that sales at U.S retailers rose 1.0% for the week ending May 26th compared to prior week, while increasing 1.8% over the prior-year period. Month-to-date, sales rose 3.1% over last year. Although there was unseasonably warm weather across much of the country, Memorial Day sales promotions failed to drive as much shopper traffic as expected. However, business from Sunday and Monday, as well as gift shopping for high school and grammar school graduations, should help lift sales in the upcoming week.