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Dept. stores drag June sales down

Same-store retail sales eased off somewhat during the second week of June as department store business slacked off sharply despite strong sales in home-related goods.

After a strong 3.9 percent increase the week before, recovering from weakness in May, the Redbook Retail Sales Average slipped to 3.3 percent, checked by continued weakness at department stores.

Same-store sales in the nation's full-price department stores fell by 2.0 percent during the second week of the month, worsening after a much smaller decline of 0.6 percent the week before.

Price-cutters continued to gobble up market share and consumer dollars, and same-store sales at discounters jumped up by 6.6 percent for a second straight week, Redbook reported.

"The slight pullback in the second week was primarily due to poorer performance by department stores," said Redbook analyst Catlin Levis. "The discount stores continued to track ahead of plan month-to-date." Through the first two weeks of June, sales at discounters had climbed by 6.6 percent, easily beating a target of a 5.4 percent increase. Department stores fell short of the mark once again, with their 1.3 percent sales decline for the two weeks month-to-date, missing a targeted decline of 0.9 percent.

"Seasonal business was again cited as a major cause of strength directly and also indirectly, since the increased traffic helped to drive traffic in other merchandise categories," said Levis."

In department stores, said Levis, "hardlines, along with home-related merchandise, maintained their category leads including home electronics, home appliances and lawn and garden equipment. Discount stores did best in food, children's wear, basic consumables, health and beauty aids, and consumer durables."

Breaking out sales on a regional basis, Levis said growth was strongest in Midwestern states, followed by the Northeast.

Redbook Retail Sales Average
Second week of June

Week ended 6/9 6/15 6/22 6/29 7/6 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department Stores* -0.6 -2.0 -1.3 -0.9
Discounters 6.6 6.6 6.6 5.4
Redbook Average 3.9 3.3 3.6 3.0


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