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Basics dominate sputtering sales

Same-store retail sales advanced by 0.9 percent over year-ago levels during the fifth and final week of June, but were skewed toward basic, commodity items, and sales for all of June came in slightly below plan.

After putting up relatively strong gains earlier during the month, sales started to cool during the past two weeks, the Redbook Retail Sales Average reported. After a solid 1.8 percent increase in the third week of June, sales growth slowed to a 1.0 percent gain during the fourth week, and slowed again to the 0.9 percent in the closing week of June.

For the entire month, same-store sales rose by 1.3 percent, falling short of a target of a 1.5 percent increase. Discounters were on plan with a 2.8 percent increase, but department stores were far short of the mark, with a 1.2 percent drop compared with a smaller 0.6 percent targeted decrease.

"Despite some improvement in the middle weeks of the month, our model finished the month marginally below plan," said Redbook analyst Catlin Levis. "Sales at department stores continued to be softer. At discount stores, consumers are continuing to focus on more basic items such as food, health and beauty aids as well as pet supplies."

Despite warm summer weather, "Retail managers reported an increasing need to offer bargains to bring consumers into their stores," said Levis. "July, typically a clearance month, will provide an indication of how well individual retailers have managed to move excess summer inventory in this promotional retail environment."

July is a four-week month on the retail calendar, ending Aug. 2, and Levis said her "preliminary target is for year-over-year growth of 1.8 percent, which, if met, could generate a 0.1 percent gain against June."

Redbook Retail Sales Average
Fifth week of June

Week ended 6/7 6/14 6/21 6/28 7/5 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department stores* -1.1 -0.9 -0.1 -1.7 -2.1 -1.2 -0.6
Discounters 2.6 2.7 3.0 2.7 2.8 2.8 2.8
Redbook Average 1.2 1.3 1.8 1.0 0.9 1.3 1.5


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