August Went Out with a Whimper for Retailers

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.

ICSC Weekly U.S. Retail Chain Store Sales Index

Week Ending	Index(1977=100)	YoY Change	WoW Change
Aug 29	491.5	-0.7%	-0.5%
Aug 22	493.8	-0.2%	0.6%
Aug 15	491.0	-0.6%	-0.9%
Aug 8	495.6	0.4%	0.0%
Aug 1	495.5	-0.7%	-0.2%
July 25	496.5	-0.5%	1.0%
*Source: ICSC-Goldman Sachs Index The ICSC weekly U.S. retail chain store sales index is a joint publication between ICSC and Goldman Sachs Group Inc. It measures nominal same-store sales, excluding restaurant and vehicle demand, and represents about 75 retail chain stores.

Johnson Redbook Weekly Retail Sales Index

Week Ending	Week YoY Chg	MTD MoM Chg	MTD YoY Chg
Aug 29	-4.1%	-0.6%	-4.3%
Aug 22	-4.4%	-0.7%	-4.4%
Aug 15	-4.5%	-0.7%	-4.4%
Aug 8	-4.2%	-0.5%	-4.2%
Aug 1	-5.4%	-1.6%	-5.6%
July 25	-5.5%	-1.6%	-5.6%
*Source: Johnson Redbook Index The Johnson Redbook Retail Sales Index is a sales-weighted index of year-over-year same-store sales growth in a sample of large U.S. general merchandise retailers representing about 9,000 stores.

Comments

[jann:]

The economy is still collapsing. It may be slower now, but as more and more people are laid off or run out of benefits, they spend less, and in a service sector dominant economy that is the kiss of death.

Sales keep on falling and more people get laid off and then spend less and sales keep on falling and more people get laid off and then spend less and sales keep on falling................

Our economy is in BIG TROUBLE and present measures are not attacking the real problem. Bernanke is trying to get GDP positive so he can claim an end to the Depression, but he is not solving the reason why we are in this horrific escalating DEPRESSION. Until he solves that we will continue in our downward spiral to economic chaos.

Sep 03 10:02 AM