Boom, Boom, Goes the Retail Business

Discussion
Jul 05, 2005
George Anderson

By George Anderson

The retail business, as they say, is booming. Retailers across the nation are expected to post monthly and quarterly sales results this week, and some analysts are looking for better than previously estimated results.

Wal-Mart has already signaled that its June numbers will come in higher than expected. Over the weekend, the retail giant announced that sales for stores open at least a year would be up 4.5 percent. The company previously had set estimates in the two to four percent range.

The Wal-Mart numbers are significant because the retailer said it was more successful in June at selling higher ticket merchandise and was not dependent on food for its improvement in performance. It said there was strong demand for seasonal merchandise and electronics in its stores.

Separately, an article in The Chicago Sun-Times citing a report by the consulting firm of Melaniphy & Associates said retail sales in Chicagoland were up 3.5 percent last year with home improvement (+13 percent) and apparel and accessories leading the way (+8.2 percent).

John Melaniphy III, the publisher of the report, said, “The rise in specialty apparel sales was significant, given that most of it was delivered by regional shopping malls.”

Moderator’s Comment: Do you see an improvement in the overall retail business environment? To borrow from The Chicago Sun-Times, what do you see
as driving the current retail boom?

John Melaniphy attributed the improvement at retail in the Chicago area to a number of factors including “low interest rates, mortgage refinancings and
a favorable income tax environment.”

George Anderson – Moderator

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4 Comments on "Boom, Boom, Goes the Retail Business"


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Al McClain
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Al McClain
15 years 7 months ago

People have jobs, the price of their homes is rising, and they are able to buy consumer goods very cheaply at the moment. Why shouldn’t retail sales be up? Even though we’re at war, you’d hardly know it except for the “support our troops” ribbons you see on cars. You certainly wouldn’t know it by spending habits.

Warren Thayer
Guest
15 years 7 months ago

Two other factors I’d add to Al’s list: surviving retailers have higher sales because so many stores have closed in the past year. And the war situation has at least been stable for the past year. A year ago, there were more fears that we were going to be getting into a much larger engagement. (That may yet be true, but the fear factor seems less.)

John Rand
Guest
John Rand
15 years 7 months ago

Let’s not forget that this is a “soft” year over year comparison.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 7 months ago
Consumer confidence is high and increasing. The lower “noise” level regarding Iraq certainly has something to do with this, along with the factors cited by George. The big stunner, to me, was that July 4th vacation travel was measured as the highest of any holiday since 9/11 (give or take), despite higher gas prices. Sales of new trucks are significantly up, and DIY sales are strong. Food sales are enjoying additional tonnage, but retail competition is holding prices steady or even lower. Here in California, the push-pull effects of a booming housing market and accompanying fear of a bubble burst in that sector have given the economy a schizophrenic nature. It must be taken as a good sign, however, that our legislature worked during the July 4th weekend to finalize some annual budget figures. We’re always late confirming a budget, and the legislators have never seemed to care before. If I had to speculate on the psychology of American workers and consumers, I’d say we’re understanding and growing more comfortable with our place in the… Read more »
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