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Back-to-School, Not Back-to-Stores

For a second straight month, American retailers reported sharply weakening same-store sales as rising gasoline prices took a big bite out of back-to-school spending and consumers shunned the malls, worried about a worsening jobs outlook.

Further complicating the situation, retailers were up against a tough comparison with last year, when sales were boosted by a one-time child tax credit.

Just how much did it hurt? The broad-based Johnson Redbook Same-Store Sales Index reported that sales edged up just 0.5 percent for a sample, way beneath the gains of 2.8 percent and 2.4 percent recorded in June and July.

And sales were even further off their heady pace earlier during the year — the 0.5 percent August increase compares unfavorably with a 4.5 percent increase for the 30 weeks year-to-date in the retail industry's fiscal year.

The wealthy will always be with us, and don't feel the bite of gas prices quite so much, and sales at the nation's luxury retailers were largely unaffected, as they were the prior month. Sales at premium nameplates like Neiman Marcus and Nordstrom remained strong, rising 14.8 percent and 7.2 percent respectively. But even the top tier isn't immune, and same-store sales at Saks Fifth Avenue rose a moderate 2.9 percent, far beneath the 12.8 percent increase recorded the preceding month.

Notably down were the nation's mass merchants, targeting, as they do, the moderate and low-income consumers. Same-store sales at Wal-Mart were virtually flat, edging up just 0.5 percent, the smallest monthly gain at the world's largest retailer since December 2000. Sales at core Wal-Mart Stores were even worse, inching up 0.1 percent, causing the retailer to trim its sales forecast for the third quarter to a range of 2 to 4 percent, down from a forecast of 3 to 5 percent growth. And Wal-Mart said profits during the quarter will come in at the low range of its forecast.

Still outperforming Wal-Mart in the mass-merchant sector, Target Stores put up a 1.8 percent increase. ShopKo declined 0.7 percent, and Value City declined 7.6 percent.

Hardest hit in August were the nation's department stores, with most reporting a slide in same-store sales. Only JCPenney and Saks reported same-store sales gains, 3.8 percent and 0.9 percent respectively. But May was down 6.7 percent; Sears, 6.1 percent; Dillard's, 5 percent; and Federated, 2.4 percent.

Along with the luxury segment, the best performing class of retailer was the one that offers the biggest bargains, the no-frills warehouse clubs. There, BJ's reported a strong 4.5 percent increase and Costco rose 4 percent. Outperforming its discount-store sibling, as it has for several months, Sam's Club put up a 2.5 percent increase.

Mixed Month

Luxury Retailers Come Out On Top
Neiman Marcus 14.7%
Nordstrom 7.2
Saks Fifth Avenue 2.9
Warehouse Clubs Still Strong
BJ's 4.5%
Costco 4.0
SAM's CLUB 2.5
Discounters Lag Far Behind
Target 1.8%
Wal-Mart Stores 0.1
ShopKo -0.7
Value City -7.6
Department stores a mixed bag
JC Penney 3.8%
Saks 0.9
Federated -2.4
Dillard's -5.0
Sears -6.1
May -6.7


August sales for major retailers
Four weeks ended August 29a

2004 sales 2003 sales Total % chg. Same-store % chg.
BJ's Wholesale Club $534.0 $493.2 8.3 4.5
The Bon-Ton Stores $86.2 $48.0 79.6 -4.6
Costco $3,650.0 $3,420.0 6.7 9.0
Dillard Dept. Stores $553.3 $575.4 -3.8 -5.0
Dollar General $570.7 $514.7 10.9 2.8
Family Dollar $406.1 $374.0 8.6 -0.1
Federated $1,047.0 $1,077.0 -2.7 -2.4
Gottschalks $47.3 $47.2 0.1 0.5
Hancock Fabrics $30.7 $30.6 0.3 0.2
JCPenney $1,540.0 $1,477.0 4.3 NA
Dept. stores $1,346.0 $1,294.0 4.0 3.8
Catalog/e-commerce $194.0 $183.0 6.0 NA
Jo-Ann Stores $120.5 $122.8 -1.9 -2.9
Kohl's Corp. $881.6 $773.4 14.0 -0.7
May Dept. Stores $1,053.9 $953.8 10.5 -6.7
Pier 1 Imports $140.4 $132.7 5.8 -2.8
Retail Ventures $209.4 $205.1 2.1 4.0
Value City Department Stores $114.3 $123.8 7.7 -7.6
Ross Stores $312.0 $315.0 -1.0 -8.0
Saks Inc. $413.5 $401.5 3.0 1.7
Dept. stores $247.6 $243.4 1.7 0.9
Sears U.S. sales $1,910.2 $2,056.9 -7.1 -6.1
ShopKo $254.8 $256.2 -0.5 0.2
ShopKo stores $194.1 NA -0.7 -0.2
Pamida $60.7 NA -0.1 -0.2
Stein Mart $91.6 $92.9 -1.4 2.4
Target Corp. $3,442.0 $3,175.0 8.4 1.8
TJX Cos. $1,100.0 $995.0 13.0 4.0
Wal-Mart Stores Inc. $21,199.0 $19,490.0 8.8 0.5
Wal-Mart stores $14,296.0 $13,362.0 7.0 0.1
Sam's Club $2,756.0 $2,651.0 4.0 2.7


YTD sales for major retailers
30 weeks month to date

2004 sales 2003 sales Total % chg. Same-store % chg.
a: Reporting periods vary from store to store.
b: for the 52-week period.
BJ's Wholesale Club $3,985.0 $3,565.7 11.8 7.2
The Bon-Ton Stores $635.4 $342.2 85.7 -1.7
Costco b $47,150.0 $41,690.0 13.1 10.0
Dillard Dept. Stores $4,079.1 $4,110.8 -0.8 -0.8
Dollar General $4,200.0 $3,700.0 11.2 3.1
Family Dollar b $5,281.9 $4,750.2 11.2 1.9
Federated $8,112.0 $7,802.0 4.0 4.0
Gottschalks $339.6 $339.8 -0.1 1.5
Hancock Fabrics $225.6 $234.3 -3.7 -4.2
JCPenney $9,430.0 $8,833.0 6.8 NA
JCPenney stores $8,058.0 $7,502.0 7.4 7.5
Catalog/e-commerce $1,372.0 $1,331.0 3.1 NA
Jo-Ann Stores $896.4 $856.8 4.6 3.8
Kohl's Corp. $5,759.6 $5,099.6 12.9 -0.5
May Dept. Stores $6,972.5 $6,826.7 2.1 -1.1
Pier 1 Imports $884.3 $830.5 6.5 -2.4
Retail Ventures $1,487.4 $1,398.2 6.4 0.4
Value City Department Stores 656..7 679,4 -3.3 -3.3
Ross Stores $2,310.0 $2,160.0 6.9 -1.0
Saks Inc. $3,282.1 $3,000.1 9.4 8.1
Dept. stores $1,867.7 $1,785.1 4.6 3.8
Sears U.S. sales $14,430.7 $14,966.0 -3.6 -2.4
ShopKo $1,765.4 NA 2.1 2.3
ShopKo stores $1,315.7 NA 2.4 2.6
Pamida $449.7 NA 1.3 1.6
Stein Mart $776.8 $727.1 6.8 10.0
Target Corp. $23,628.0 NA 11.7 5.0
TJX Cos. $7,900.0 $6,900.0 14.0 5.0
Wal-Mart Stores Inc. $156,264.0 $140,007.0 11.6 4.1
Wal-Mart stores $104,889.0 $95,159.0 10.2 3.3
Sam's Clubs $20,842.0 $19,133.0 8.9 4.1


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