U.S. retailers were afflicted by the summertime blues last week and their fortunes aren’t expected to improve substantially when the weather cools off for the back-to-school season.
During the seven days ended July 11, sales fell 1 percent on a week-over-week basis, according to The Retail Economist-Goldman Sachs Weekly Chain Store Sales Index. At an index reading of 595.5, the year-on-year figure was up 1.9 percent, the third time weekly sales had failed to achieve a 2 percent increase in five weeks.
Furniture and home-related retailers continued to deliver the strongest performances among the retail sectors covered.
“The percentage of consumers not shopping was the highest since mid-January, which contributed to the week’s sluggish sales pace,” said Michael Niemira, chief economist and principal of The Retail Economist. “Additional factors that accentuated the lackluster demand were heavy precipitation around the nation, which curbed the consumer’s desire to shop, and the typically lighter volume of business during the summer clearance period in early July.
“But as the back-to-school sales period kicks in shortly, consumers will have more incentive to shop,” he concluded.
In his forecast for the b-t-s season, Niemira forecast a 2.1 percent sales increase, to about $42.5 billion, in the key categories of apparel and shoes, electronics and book, with apparel sales growing 2 percent to $23.6 billion, footwear excelling with a 4.5 percent sales gain to $9.3 billion, electronics up 1.2 percent to $6.3 billion and book sales declining 2 percent to $3.2 billion.
Further, he expects the strongest overall increases to come in September, when he anticipates a 3 percent increase to $13.3 billion in the covered categories, versus July, when sales are expected to rise 2 percent to $13.5 billion, and August, when the forecast is for a 1.8 percent increase to $15.8 billion.
The strongest performance in the previous five years came in 2010, when stores bounced back from the recession with a 5.1 percent increase to $37.7 billion, and the weakest was last year, when sales rose 1.8 percent to $41.6 billion.
Apparel sales rose 3.3 percent to $20.2 billion in 2010 and 2.1 percent to $23.1 billion last year.
Niemira believes that changes in state sales tax holidays will lead consumers to buy slightly later than last year but, he added, “with little net impact…for the season.”