The U.S. Census Bureau reported yesterday that Advance Monthly Retail Sales for June were up 0.6% from the prior month, better than the 0.4% rise analysts were expecting and the biggest jump since January.
However, most of those gains came from increases in auto and gasoline sales, and the headline figure looks a little less impressive when you consider that sales are down 9.0% from a year ago.
Excluding autos, gasoline, and building materials, which is used to calculate GDP figures for consumer spending, sales declined 0.1% for the second straight month:
Following on the heels of weak reports from over 30 retailers last week, two research firms reported yesterday that weekly same-store retail sales didn't show much improvement in the 1st week of July:
- After reporting last week that retail same-store decreased by 5.1% in June YoY, the International Council of Shopping Centers (ICSC) said that comparable same-store sales for large chain stores fell by 0.7% in the first week of July vs a year ago, while same-store sales decreased 0.9% on a week-over week-basis, the first weekly drop in a month. Commenting on the results, Michael P. Niemira, ICSC chief economist, said,
The cool weather pared seasonal demand, which accentuated the challenges for the industry from the economy and from reduced clearance for some retailers that did not stock up for the season. July will likely be another tough month as it is a clearance month for seasonal goods and many retailers already took hefty markdowns and have less to clear than one-year ago, since they ordered less too. Given this, ICSC Research anticipates industry sales to be down by about 5.5 percent from last year.
- Redbook Research reported that retail same-store sales for the week ending July 11th declined 5.7% compared to the year-ago period, as well as down 4.3% from last month. Note that Wal-Mart (WMT) 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.
It's become quite clear that investors should not expect much improvement in retail for the rest of the summer. With an early start to promotions and Labor Day falling a week later than last year, retailers are hoping back-to-school season saves the day.
