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Holiday helps retailers beat target

Getting an extra boost from promotions over the July 4 holiday weekend, same-store retail sales came in modestly ahead of plan during the first week of July, the Johnson Redbook Index reported, rising 2.8 percent above year-before levels, besting a forecasted 2.6 percent increase.

Getting the month off to a solid start, both department stores and mass merchants did better than expected. Same-store sales in department stores rose 2.3 percent, slightly ahead of a target of 2.2 percent growth. Sales at the nation's big discounters increased 3 percent, exceeding a targeted increase of 2.8 percent.

Measured against the month before, sales declined 0.5 percent from June levels, an improvement over an expected 0.7 percent decline.

"Sales over the July Fourth holiday weekend left our model somewhat ahead of plan after the first week," commented Redbook Analyst Catlin Levis. "The July Fourth holiday and its associated sales promotions increased customer traffic as well as sales for the week."

Levis said, "Toys, household basics and consumables sold well at discount stores, especially food, which benefited from holiday buying."

The Redbook analyst said, "The focus in July is on clearing seasonal stock. Sales performance is typically driven by discounting and can vary sharply from week to week depending on individual store promotions and the availability of saleable goods, which may be a limiting factor this year, given tight inventory management. Hen-ce, business in July is likely to be relatively scrappy and trend-less."

Looking ahead, Levis said, "We will have to wait until August, and probably the second half of that month, to get a good idea of how consumers are feeling and how retailers are faring."

Scoping out business on a regional basis, Levis said, "The East Coast performed better than the rest of the country."

Johnson Redbook Retail Sales Index
First week of July

Week ended 7/10 7/17 7/24 7/31 Month Target
Department stores* 2.3 2.3 2.2
Discounters 3.0 3.0 2.8
Redbook Index 2.8 2.8 2.6
*Including chain stores and traditional department stores.
Source: Johnson Redbook Index

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