No Swoon in June: Retail Numbers Climb

Discussion
Jul 08, 2011
George Anderson

Hot weather and hotter deals are being given the credit for unexpectedly strong same-store sales numbers rung up by retailers in June.

According to Thomson Reuters, retailers saw comparable store sales increase 6.5 percent for the month compared to the 4.9 percent expected by analysts. It more than doubled the 3.1 percent increase see in June of last year.

A positive sign for merchants heading into July, according to Thomson Reuters, was that retailers saw sales pick up toward the end of June.

Ken Perkins of Retail Metrics, told the Star Tribune, that same-store sales for June were up 5.6 percent at chains he follows.

"Deep discounting and widespread promotions across the industry lured consumers into stores in June," Mr. Perkins told the Star Tribune. "Hot seasonal weather helped boost summer clearance merchandise."

Gains were pretty widespread across retail channels with winners including Costco (+14 percent), Kohl’s (7.5 percent), Macy’s (6.7 percent), Saks (11.9 percent) and Zumiez (9.8 percent).

Retailers reporting same-store increases but falling below the Thomson Reuters‘ average for the month included Gap (+ 1.0 percent), J.C. Penney (2.0) and Target (4.5 percent).

Discussion Questions: What is your take on the June retail numbers? Do you think retailers are in a good position heading into the back-to-school season?

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12 Comments on "No Swoon in June: Retail Numbers Climb"


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Bob Phibbs
Guest
9 years 10 months ago

Someone has to pay for those discounts, shareholders, employees or vendors–they don’t come without a cost. Too bad that can’t be seen at the same time.

Paula Rosenblum
Guest
9 years 10 months ago

Well…given that school starts in August in a lot of communities now, I think the Back-to-school season is really diluted, except for school supplies. Fall clothing is just not a happening thing in August.

However, overall I think the 85% of Americans that are employed are determined to continue shopping. It seems to be our strong suit. Value-conscious for sure…checking prices with competitors, definitely. But ready and willing to buy? Yes.

And all the data I’m seeing is telling me inventories are pretty lean, which bodes well for retailers I think, across the rest of the year.

Charlie Moro
Guest
Charlie Moro
9 years 10 months ago

I think you have to be very careful in a world of 9.2% unemployment to believe that the enthusiasm has returned to retail purchasing or, more importantly, that the cutting of margins to push the top line is going away any time soon.

Ben Ball
Guest
9 years 10 months ago

Some channels are reporting heavy backlogs of summer seasonal inventory. June was mostly ‘catch up’ with the fact that the Midwest, at least, has had no summer to speak of until then. Retailers are talking about starting the BTS merchandising up to 10 days late in order to clear these backlogs. That’s not good.

Cathy Hotka
Guest
9 years 10 months ago

“Deep discounting and widespread promotions across the industry lured consumers into stores in June” is the key part of this story. Consumers will continue to buy the things they need if they think they’re getting a great deal. There are loads of people at my new Nordstrom Rack; the Neiman’s across the street, not so much.

Ralph Jacobson
Guest
9 years 10 months ago

This economy is very much still in a fragile state. Although the stock market is gaining strength, too many retailers are still failing and closing their doors. I think this sales blip is just that, a blip. Last year’s comps are weak and this is no tsunami of business by any means.

Kai Clarke
Guest
9 years 10 months ago

This is a great story…except that it is incomplete. What happens after the reported gross revenue increase (i.e. is there a corresponding increase in profits?) is the real story. It is great stock market “fluff” to have a short term blip in revenues, but the real truth happens when everyone reports their profits next quarter.

Roger Saunders
Guest
9 years 10 months ago
When analysts can’t explain why retail sales are UP or DOWN, they always have the “safe guard” of blaming it on the weather. Instead of looking at the sky in hindsight, take the appropriate step–look at the consumer. Here is the headline on the release that BIGresearch sent out in early June about the outlook for comparable store retail sales. 6/8/11 Consumers Expecting to Pay More for Apparel Provides Lift in Same Store Sales Forecast, According to Latest ForecastIQ Analysis That outlook is from the Forecast IQ report. The report is based on the responses of 8,500+ Adults in the monthly Consumer Intentions & Actions (CIA) Survey. The ‘Wisdom of the Crowd’ will consistently beat individual forecasters who are checking cloud cover from the previous month. Forecast IQ provides a look at comp store sales 45- and 75-days ahead–we already know how many black socks were sold 3 months ago–we need to know how many will be sold in the coming 3 months. If you look at the the Forecast IQ charts now (no charge,… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
9 years 10 months ago

What’s the definition of a “good position?” Doors unlocked, air conditioners working hard, cash registers warmed up, and plenty of inventory? Sales in June have nothing to do with sales in July for back-to-school. Momentum from June? Hardly. Shoppers getting reacquainted with the stores? That’s just silly. In today’s economy, with few if any positive trends to reference, back-to-school must stand on its own with no tailwind for help.

Phil Rubin
Guest
9 years 10 months ago

While the June retail sales numbers were very solid, they are relative and the comparisons were to a year (2010) that, while better than 2009, was not exactly banner. The discounting is a huge issue still and only getting worse. Five % flat and forever discount, anyone?

Today’s news on the job front presents a very real risk to the economy, however. More important, the dearth of leadership in Washington (on both sides), could be a problem that makes these jobs numbers look benign.

Bottom line: it’s too early to be bullish on back-to-school unless the politicians get their act together.

Mark Burr
Guest
9 years 10 months ago

Costco is no surprise. Their same store sales have been climbing for some time and have averaged a minimum of 8% throughout.

The others are directly related to promotional activity. The Gap had nowhere else to go but up.

The current outlook is anything but positive. Today, unemployment climbed to 9.2% with weeks of over 400,000 in new applications. Gas prices are bouncing but have not declined in significance as oil remains unstable. The budget deficit talks, increasing foreclosures, etc., etc., etc. An optimist can find a silver lining somewhere in anything. It must be the weather…it has to be…doesn’t it?

One thing is for certain–uncertainty abounds. If anything that in itself can cause anomalies. I’m absolutely uncertain about most everything. It’s not a trend; if anything, the trend is backsliding.

Ted Hurlbut
Guest
Ted Hurlbut
9 years 10 months ago

I’m really beginning to think that in the short term, gas prices will be the bellwether for retail sales. Gas prices up, retail sales down. Gas prices down, retail sales up.

I don’t see discounting patterns being able to overcome this dynamic. Consumers get an attitude adjustment every time they fill up.

That said, for most major national retailers, deep discounting is the price of admission to the game. When consumers are ready to spend, you better be on sale.

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