Value Retailers Win in June
July 12, 2007,
New York – Stuck in the summer doldrums, same-store retail sales remained weak for a third straight month, with off-pricers doing most of the positive business in June and full-price department stores lagging far behind, all posting declines.
The Johnson Redbook Flash Report, which tracks results of 54 major retailers, edged up by 2.2%, weakening from a 2.7% increase in May. But they were glad to take whatever gains they could after a dismal showing in April, when sales dropped off by 1.7% for the entire sample.
The only thing drawing consumers out were low prices, putting warehouse clubs and off-pricers in the catbird seat last month. The strongest performer in the HTT ranking was Sam's Club with a hefty 7.6% same-store increase, easily outperforming sibling Wal-Mart Stores with its better than expected 1.6% increase. Not far behind were Costco, up 6.0% and BJ's, up 5.3%.
But picking up the rear with a huge 18.1% drop in comps was The Bon Ton regional department store chain. Same-store sales in the Bon Ton-owned Carson 's division slipped at a slower pace of 1.7%, while comps for the combined operations fell 8.0%. Acting as a drag, said Tony Bucina, vice chairman and president-merchandising, were home and furniture, “the weakest performing areas.”
Kohl's found itself in an unaccustomed spot on the losers list, with comps falling off by 4.5%. Larry Montgomery, ceo, blamed a shift in the calendar, which pushed Memorial Day sales into the May retail month.
Department stores as a class fared poorly, with Gottschalks sliding by 4.3%, Macy's off by 2.7% and Penney down by 1.5%. And Macy's doesn't expect sales to improve any time soon, forecasting a 3% drop for July. That's going to take a toll on profits, which Macy's now says will come in lower than expected, in the range of 20 to 30 cents, weakening from an earlier forecast of 35 to 45 cents – excluding costs of integrating May stores into Macy's.
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