Dog days undercut back-to-school chain sales
September 4, 2008,
New York – Unlike recent months, even the warehouse club retailers failed to post double-digit comparable store sales gains in August, a month where the off-price titans TJX Cos. and Ross Stores also felt their strong 2008 tailwinds diminish.
“August results were negatively impacted by the continued weakness in customer traffic as well as a reduced level of clearance merchandise in our assortment,” summed up Tony Buccina, vice chairman and president - merchandising, Bon-Ton. He went upbeat on one front: “We have managed our inventories such that on a comparable-store basis, inventories were down in excess of 8% compared with the prior year. Our lean inventory position bodes well for fresh product flows as we head into September.”
Retailers across the board said they have cut and slashed inventory to the bone, the one surefire way to protect their chances for profitability this year. But the early results for the back-to-school merchandising season were not promising.
JCPenney comps slid 4.9%, and the major mid-tier retailer noted that “fine jewelry and home experienced the weakest sales during the month.”
While Wal-Mart stated that its shoppers “responded well to school and college seasonal offerings throughout the store, driving sales in denim products, licensed apparel, school supplies and home furnishings,” the big retailer posted just a 2.8% comp gain.
Wal-Mart’s sister chain boasted, “For the fifth consecutive sales period, Sam’s Club experienced increases in comparable club traffic and ticket with both our Business and Advantage members,” according to Doug McMillon, president and ceo. But he emphasized: “The sales mix continues to move more toward food and consumable items as members buy more basics at Sam's Club. Our back-to-college sales performance reflected that trend, with necessities driving purchases over more discretionary items.”
The warehouse club sector, with a comp gain of 7.7%, was well ahead of its peers among the 39-retailer Johnson Redbook Same Store Sales Index (SSI) in August; department stores hit their deepest decline, 5.9%, since the 10.7% falloff in March.
The SSI overall posted a 1.4% gain for August, following the 2.1% rise in July. The rate has flattened the 3.7% gain posted in June.