Retailers across the country said sales slowed in September following a busy back-to-school season. The 17 retail chains tracked by Thomson Reuters I/B/E/S reported a cumulative same-store sales increase of 3.6%, in line with analyst expectations. This compared to 6.4% gains a year ago.
Mid-tier retailers as a segment of the 17 reporting companies had combined improved sales of about 2% from a year ago. The higher-tier retail segment did better, up roughly a 5%.
Tim Stemberg, manager of the Highland Consumer Fund, says Americans could spend more if they felt better about the economy on the whole. He said retailers are still coming up from very low levels in the past few years and the numbers aren’t anywhere near optimum.
TARGET BOWS OUT
On Thursday (Oct. 4) Target said in 2013 it will no longer provide monthly sales reports to the media.
“This decision is based on discussions with many of our investors and is consistent with the practice of the vast majority of our retail peers,” said John Mulligan, executive vice president and chief financial officer of Target. “We believe aligning our sales guidance and reporting with disclosure of our quarterly financial results will create a longer-term focus and provide greater understanding of our sales results in the context of our overall financial performance.”
Target’s rival – Wal-Mart Stores Inc. – abandoned monthly sales reports two years ago amid dismal comparable results in Wal-Mart’s U.S. stores. But that wasn’t the case with Target’s announcement today.
Target reported its net retail sales for the five weeks ended Sept. 29, were $6.075 million, up 2.6% from $5.923 million in the year-ago period. On this same basis, September comparable-store sales increased 2.1%.
"Target's comparable-store sales performance in September was in line with our guidance for the month," said Gregg Steinhafel, chairman, president and CEO of Target Corp. "We're pleased with our sales results through the first two months of the quarter and believe we remain on-track to attain our third-quarter sales and profit goals."
Analysts have said without two of the largest retailers contributing, the monthly sales data will not be the gauge it once was on broad consumer sentiment. J.C. Penney also pulled its monthly sales reports this year as it revamped it’s pricing platform. These three retailers bowing out of the monthly game comprise a lion’s share of the mid-tier and mass category of the retail spectrum.
Kohl’s and Walgreens were among the retailers losing ground in store traffic and comparable sales last month. Kohl’s reported monthly sales of $1.6 billion down 1.4% from a year ago. Stores open at least one year posted a 2.7% decline from September 2011.
The gap was worse for Walgreens reporting September sales of $5.48 billion, a decrease of 7.8% from $5.94 billion for the same month in fiscal 2012.
Total front-end sales decreased 0.4% compared with the same month in fiscal 2012, while comparable store front-end sales decreased 1.5%. Customer traffic in comparable stores decreased 2.3% while basket size increased 0.8%.
Despite a positive outlook from the National Retail Federal for holiday sales some economists say retailers have their work cut out for them through the end of this year.
"Economic headwinds nagging consumers this fall include stubbornly high gasoline prices that continue to creep up and soft housing and job markets," said Carl Steidtmann, Deloitte's chief economist. "While consumers turned out in the summer to give retailers solid gains for a few months, that pace may be difficult to sustain through the end of the year.”
Steidtmann added that consumers and businesses alike may pause in advance of the election, but he said that could equal some pent-up demand that would benefit retailers post November.