Retail sales finish soft in September
October 12, 2001,
Still deeply affected by terrorist attacks on New York and Washington, waning consumer confidence and a substantially eroded employment outlook, retail sales remained weak during the fifth and final week of September, slipping by 0.2 percent from last year's levels.
And that prompts new fears about profits going forward, as retailers will have to start promoting to clear their shelves of aging inventory.
"September thus ended substantially below our retailers' target," said Redbook analyst Catlin Levis. "Many retailers were impacted by the tragic events that occurred on Sept. 11 and the resulting effect on consumer confidence. Department stores were the most affected, given their proportionately greater exposure to apparel and other discretionary goods."
Levis added, "As a result of weak sales, department stores will be forced to further cut prices in order to scale back inventories. Additionally, many manufacturers have started to unload merchandise sooner than usual to avoid getting caught with excess inventories."
Discount stores, on the other hand, "have typically done far better on a broader mix of business and have remained on or close to sales targets."
Looking ahead, Levis said the four-week retail month of October includes two holiday events that could provide a shot in the arm to some retailers, Columbus Day and Halloween. Year-over-year comparisons are favorable due to the fact that Halloween falls a week earlier this year. This will sweep some business into fiscal October from November. Our preliminary sales growth target for October is 1.1 percent, which would result in a month-to-month gain of 1.1 percent."
Redbook Retail Sales Average
Fifth week of September
|*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.