Slow Back-to-School Start Stymies Comps
August 21, 2006-- Home Textiles Today,
With cash-strapped consumers buying closer to need, and back-to-school sales so far lagging behind plan, same-store retail sales remained largely stuck in neutral during the second week of August. Sales edged ahead a modest 3.2% over year-ago levels and fell beneath target for a second straight week.
Surprisingly, department stores actually outperformed discounters during the week, propelled in part by clearance activity, pushing same-store sales up by 3.3%, narrowly besting discounters with their 3.2% increase.
For the two weeks month-to-date, sales have fallen beneath their target, up 3.2%, compared with an anticipated gain of 3.3%. Measured on a month-over-month basis, sales rose 0.2% above July levels, missing a targeted gain of 0.3%.
Some regions benefited from tax-free holidays, but it wasn't enough to give the national numbers much of a boost. “The state tax-free holidays, including Sunday, Aug. 6, and in the case of Washington, D.C. all of last week, propelled traffic and sales in Alabama, the District of Columbia, Georgia, Missouri, New Mexico, North Carolina, South Carolina, Tennessee, Texas and Virginia,” said Redbook analyst Catlin Levis. “At this point in the calendars, most retailers are seeing business generally balanced between summer clearance and back-to-school/fall buying, although clearance activity is expected to decline rapidly over the next few weeks.”
Stymied by rising gas prices and higher credit-card interest rates, “Consumers are increasingly buying closer to need,” said the analyst. And so far, she added, “Back-to-school sales generally have lagged behind plan, but for the most part it is still too early to tell how consumers are reacting to them. Parents are more cautious about spending and are taking a more value-oriented approach in their back-to-school shopping.”
Johnson Redbook Index
Second week of August, year-over-year % change
|*Including chain stores and traditional department stores.
Source: Johnson Redbook Index
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