Pent-up demand opens wallets
July 21, 2003-- Home Textiles Today,
With warm, dry weather finally settling in around most of the nation, consumers started making their long-deferred purchases of seasonal merchandise, sending same-store sales up with their biggest weekly gain in the past six months, the Redbook Retail Sales Average reported.
Recovering from relative weakness during the closing weeks of June, sales jumped up by 2.8 percent, well ahead of plan, and the strongest weekly performance since a like 2.8 percent increase during the fifth week of December at the height of the post-Christmas sales frenzy.
Even department stores, battered during the consumer spending slowdown of the past two years, fared relatively well, coming in on plan with a small 0.4 percent increase, bouncing back after a long string of declines. Discounters raced well ahead of plan with a 4.2 percent increase easily surpassing a target of a 3.1 percent gain.
"Retailers said the week represented a strong opening to the month with sales generally on or above plan," said Redbook retail analyst Catlin Levis. "Business was brisk and traffic in stores was positive."
And it was the weather, said Levis, that provided shoppers with a long-delayed incentive, and retailers with a much needed lift. "The weather was cooperative," the analyst emphasized. "The heat waves over most of the country helped seasonal goods move as stores stepped up clearance-oriented promotions ahead of fall restocking."
Demand, said Levis, "was steady for soft-line merchandise such as swim wear, shoes and jewelry accessories."
With business finally starting to turn, retailers are becoming more optimistic, said Levis. "Based on a combination of factors, including weak comparisons with the second half of 2002; tax cuts; continuing low mortgage rates; and new merchandise offerings, some retailers feel momentum is building and are optimistic about their second-half outlook, which should make sales look better."
Breaking results out by region, the Northeast was the top performer.
Redbook Retail Sales Average
First week of July
|*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.