Retail sales improved on both a year-on-year and sequential basis last week while department and apparel stores saw already difficult sales trends weaken.
According to The Retail Economist-Goldman Sachs Weekly Chain-Store Sales Index, sales during the week ended July 18 rose 2.5 percent on a year-over-year basis while creeping up 0.3 percent over the prior week.
Furniture stores continued to see improvement, as they have for several months, while discounters and drug and dollar stores also saw business trends firm.
However, with shoppers more interested in summer clearance than new fashion arrivals in stores, department and apparel stores saw a further weakening in sales activity, as did electronics and grocery stores and wholesale clubs.
Michael Niemira, principal and chief economist of The Retail Economist, said, “The pace of consumer spending strengthened last week following very sluggish demand in the prior week. Over the past week, the hot and humid weather in various parts of the country helped spur some late summer clearance demand, but the real test for the industry will be how strong back-to-school demand is.”
In the prior week ended July 11, sales fell 1 percent on a weekly basis and rose 1.9 percent when measured year-on-year.
Weather Trends International said that temperatures last week were 2.9 degrees warmer than in the comparable 2014 period and 0.8 degrees above their long-term normal average.
While relief from the heat was difficult to find, consumers did receive some good news at the gas pump as the average price of a gallon of unleaded slid 3.2 cents to $2.802, 22 percent lower than a year ago.
Niemira last week forecast a 2.1 percent increase in back-to-school sales over those of a year ago, to about $42.5 billion, with apparel growing about 2 percent to $23.6 billion and footwear growing 4.5 percent to $9.3 billion. He expects the strongest increases for the season in September, about 3 percent, following by July, about 2 percent, and August, about 1.8 percent.