July Sales Stronger Than Expected
Call it a July surprise.
Chain-store sales increased 4.6 percent, according to an index from trade group International Council of Shopping Centers. The increase showed a lot of vigor during a month many expected to be soft, said Michael Niemira, chief economist for the ICSC.
“July is typically dominated by summer clearance, so this stronger-than-expected performance is particularly encouraging, especially after the softer three-month run we have just been through in the industry and the overall economy,” Niemira said.
July’s retail rally was a bright spot during a time of gloomy economic headlines, said Ken Perkins, president of Retail Metrics Inc., a research firm based in the Boston area. However, increased sales are not a result of significantly improved economic conditions.
“There may be pent-up demand,” Perkins said. Consumers have been holding back spending for the past few months. July’s typical summer clearance sales also attracted customers to stores. “The introduction of newness with initial Fall offerings and some Back-to-School merchandise did help build sales,” he added.
One of the best-performing specialty retailers during July was Gap Inc. The long-suffering San Francisco–headquartered company reported a 10 percent increase in same-store sales compared with the same time in 2011. Perkins called the performance Gap’s biggest monthly comp increase since March 2010.
The rest of the specialty retail market continued to be a mixed bag. Foothill Ranch, Calif.–based The Wet Seal Inc. reported a same-store-sales decline of 15.6 percent. Everett, Wash.–based Zumiez Inc. reported a same-store-sales increase of 7.5 percent.
Department stores turned in solid performances during July. Macy’s Inc. reported a same-store-sales increase of 4.9 percent, but Nordstrom Inc. reported a tepid increase of 0.9 percent. The Seattle-based company blamed its small increase on scheduling. Nordstrom’s largest event of the year, the Anniversary Sale, started one week later in July compared with last year. An additional week of the event shifted into August, and, subsequently, July sales did not appear as strong.
Discounters and off-pricers reported a very good July. Target Corp. reported a 3.1 percent same-store-sales increase. Both Ross Stores Inc. and TJX Inc. reported 7 percent same-store-sales increases.
August sales are forecast to be strong, said the ICSC. Back-to-School sales will push retail sales up 4 percent to 5 percent. —Andrew Asch
