Shop Talk
Retailers, consumers and prices
Check Out Line: A decline in weekly sales numbers
Check out the decline in weekly U.S. same-store sales gains.
After two consecutive weeks of strong positive weekly sales gains, retailers saw their sales take a breather with a 1.5 percent decline in the week ending July 10, according to the International Council of Shopping Centers and Goldman Sachs.
Sales in the weeks ending July 3 and June 26 rose 1 percent and 2.1 percent, according to the report.
On a year-over-year basis, sales also slowed to 3.2 percent, but continued to remain positive.
“Sales showed a mixed performance over the past week as the seasonally-adjusted year-over-year pace continued to rise — although the unadjusted pace was much stronger due to the holiday-sales lift from a calendar shift when the Independence Day federal holiday was celebrated in 2010 and 2009,” ICSC chief economist Michael Niemira said in a statement.
The ICSC reaffirmed its outlook for July U.S. same-store sales to increase in the range of 3 percent to 4 percent, compared with a 5 percent decline last year.
However, U.S. retailers relied heavily on promotions to boost June sales, suggesting profit margins may suffer as they head into the key back-to-school shopping season.
The Weekly Chain Store Sales Snapshot is produced by the ICSC and Goldman to measure U.S. same-store sales, excluding restaurant and vehicle demand, and represents about 75 retail chain stores.
Meanwhile, Goldman analyst Michelle Tan said in a separate research note that there are few reasons to buy stocks in the apparel retail sector assuming a slow recovery. It cuts its 2010, 2011 and 2012 profit estimates by an average of 7 percent.
“In a slow recovery with little sequential improvement in employment, sector sales have averaged less than 2 percent with flattish margins; this implies about 9 percent risk to Street forecasts,” Tan wrote. “History suggests downside risk to estimates in a double-dip scenario is roughly two times the upside in a robust recovery.”
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(Reuters photo)
Check Out Line: Retail joy in sunny days?
Check out the welcome warm weather.
The long anticipated arrival of warm weather helped boost U.S. consumer spending 1.6 percent in the week that ended June 27, from a week ago – the strongest gain since matching its Jan. 31 results, according to a stody by the International Council of Shopping Centers and Goldman Sachs.
On a year-over-year basis, sales rose 0.6 percent.
“A bout of seasonally hot weather late in the week helped to trigger consumer spending,” ICSC chief economist Michael Niemira said in a statement. “This late June sales spark was a welcome sign for the industry and the economy. ”
However, he added, ”for the month as a whole, June sales continue on track for a ‘tough’ month with the early part of the month weighing heavy on its performance.”
Excluding Wal-Mart Stores, which has stopped reporting monthly sales, the ICSC expects June sales to be down by about 5 percent.
Check Out Line: No stimulus checks, gas prices rising
Check out a lack of government stimulus checks and rising gas prices weighing on consumers –and the retailers that are trying to sell them stuff.
Best Buy reported lower earnings for its fiscal first-quarter (which ended May 30), and said sales at its stores open at least 14 months declined the most during May. A year ago it got a boost in that month when shoppers came into its stores to spend those government stimulus checks.
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