Retail same-store sales fall below plan in May
June 11, 2001,
NEW YORK — With a disappointing Memorial Day holiday acting as a drag, retail same-store sales fell below plan during the fourth week of May and for all of last month, despite moving up by more than 2 percent over year-before levels, according to the widely watched Redbook Retail Sales Average.
Hobbled by the soft holiday, unseasonably cool weather and persistent weakness in the department store channel, sales for the month advanced by 2.3 percent but still fell modestly shy of a targeted gain of 2.6 percent, the Redbook reported.
Once again, dollar-conscious consumers flocked to the nation's big discount stores, and shunned more pricey department store outlets. Same-store sales at discounters moved up by 2.3 percent for all of last month, compared with a target of 2.6 percent. But department stores continued their long slide, declining by 0.8 percent, somewhat worse than the projected 0.6 percent decline.
"Memorial Day sales were generally considered disappointing as noticeably cooler temperatures in many parts of the country curbed summer business," said Redbook analyst Catlin Levis. "The persistence of unseasonable weather in recent weeks, occurring at the start of the spring selling season, raises the possibility that stores will have to take markdowns and cut margins from mid-June on in an effort to clear seasonal goods. Certain retailers reported strength in merchandise related to school graduation such as women's wear, men's wear, footwear and women's accessories."
Levis added, "Consumers are continuing to face budget cuts and are finding their way to discount stores. Discount stores have been steadily lowering prices to be competitive. Retailers have also become even more 'all-weatherproof' by expanding into common household staples and household items including food, health and beauty products, home cleaning products as well as pet supplies."
Looking at the current month, Levis said June is a five-week month on the retail calendar ending July 7. The preliminary plan for June is for 2.5 percent year-over-year growth, leading to a month-over-month sales decline of 0.2 percent.