WASHINGTON — Sales at department stores and general merchandise stores fell for a second straight month in August, as overall retail sales posted strong gains, the U.S. Department of Commerce’s monthly report showed Friday.
Department store sales declined a seasonally adjusted 0.4 percent to $14 billion last month, while sales at general merchandise stores, a category that includes department stores and discounters, dipped 0.1 percent to $55.5 billion.
Sales at apparel and accessories stores continued to grow slowly, posting an increase of 0.3 percent to $21.3 billion last month.
Keith Jelinek, senior managing director of FTI Consulting, said specialty stores have been struggling, despite some modest sales gains in the past two months.
“The softness [in the segment] is almost 100 percent in the teen category,” he said. “Those that are in the specialty retail category that cater to a more mature female shopper and mature with plus sizes…are doing OK. But specialty retailers catering to teens…have not had much success lately in developing a product trend that is a strong fashion statement.”
Jelinek said department stores with a “national footprint” have put out some warnings that the fourth quarter will be weak.
“I think they are the ones struggling right now,” he said. “The ones that are better positioned are the regional department stores…that have worked harder to tailor their assortments and promotional offerings to their customers.”
Characterizing the back-to-school season as “decent,” Jelinek said there are headwinds going into the holiday season. “I think what we are going to see is stepped up promotions,” he said. “I think retailers are going to be vying for their share of the wallet early and not going to want to wait.”
Jack Kleinhenz, chief economist at the National Retail Federation, said the new figures suggest that consumers are “willing and ready” to spend, but he cautioned that some impediments to spending remain.
“The rise in consumer confidence, labor markets and retail sales is encouraging, however not quite strong enough yet for consumers to go on a shopping spree,” Kleinhenz said. “Until income and wages pick up, we shouldn’t expect a sustained surge in consumer spending.”
In the overall economy, retail sales rose 0.6 percent to $444.4 billion, generally in line with economists’ expectations.
Chris G. Christopher Jr., director U.S. Consumer Economics at IHS Global Insight, said he expects back-to-school sales to show “solid growth, albeit not quite as strong as last year.”
“This holiday season — with less than 100 days to Black Friday — is expected to glitter in comparison to the last two years, with growth of 4.2 percent,” he said. “This is partly the result of last year’s extraordinary winter weather providing a low bar and a depressed base, especially considering that the government shutdown in October of last year caused consumers to take a cautious stance.”