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Retail sales wilt in August heat

With consumers unnerved by a spotty job market and an uncertain economy, and Back-to-School sales falling beneath expectations, same-store retail sales for all of August fell 1.7 percent beneath July's already debilitated level, according to a widely watched tally of cash register activity, the Redbook Retail Sales Average.

The August drop was substantially steeper than a targeted decline of 0.4 percent, Redbook reported.

Measured against August 2001, same-store sales were virtually flat, edging up just 0.1 percent, and falling well short of a forecast increase of 1.5 percent.

Department stores and full-price retailers were particularly hard hit during August, with sales falling off by 5.2 percent from year-ago levels, compared with a targeted drop of 3.4 percent. But even discounters were sharing the pain last month, with sales falling short of the mark. Discounter same-store sales edged up by 3.6 percent, but missed a target of 4.6 percent growth.

"Back-to-School sales have not been meeting expectations, especially in the apparel and accessories merchandise classifications," said Redbook analyst Catlin Levis. "Most stores missed or appeared at the lower end of their targets."

Looking ahead to September, retailers are planning more conservatively, said Levis, building in the likely fallout from the Sept. 11 anniversary. "Retailers expect September Back-to-School and fall business to be pressured by disruption from the one-year anniversary of the terrorist attacks," Levis pointed out. "Many stores will either be closed or will open their doors late out of respect for the victims of Sept. 11. Many consumers will be attending memorial services or staying home to watch TV."

Calculating the effects of the anniversary, Levis said the preliminary September target is for year-over-year same-store sales growth of 1.5 percent. But sales are expected to dip by 0.2 percent from the already weakened August 2002 numbers.

Redbook Retail Sales Average
Fourth week of August

Week ended 8/10 8/17 8/24 8/31 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department Stores* -4.5 -5.2 -5.1 -5.8 -5.2 -3.4
Discounters 4.4 3.1 3.4 3.5 3.6 4.6
Redbook Average 0.8 -0.2 -0.0 -0.2 0.1 1.5


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