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After three months of consecutive increases, consumer confidence in June reflects the downside of a higher unemployment rate as it dropped 6 points to settle at an index of 49.
Despite lower consumer confidence, All Stores sales, which was down -7.8% in June, was still 2.0% higher than the year-to-date (-9.8%) results. Sales for All Stores minus Motor Vehicle and Parts Dealers and Gasoline Stations were down only -2.8% for the month.
Indications that the recession may be at a plateau are visible within the majority of retail categories, as June sales growth outperformed its year-to-date sales.
Health and Personal Care Stores sales were up 3.7% for June, outperforming its year-to-date growth (2.8%) and that of all other retail store categories.
Sporting Goods, Hobby, Book and Music Stores sales growth was flat at -0.2%, but it was better than its year-to-date results (-2.1%).
Growth of big-ticket retailers, while still down this month, had a marked improvement in comparison to the year. Building Material and Garden Equipment Stores fell to -8.9% vs. -11.4% year-to-date. Furniture and Home Furnishings Stores sales growth was -10.5%, versus a year-to-date sales growth of -14.0%. A weak but stabilizing housing market may account for decelerating decline.
A few categories saw no improvement in June from its year-to-date results. Sales growth for Food and Beverage Stores were flat at 0.3% (YTD 0.2%); Grocery Stores sales growth was slightly lower at -0.3% for both the month and the year-to-date.
Clothing and Accessories stores fared only slightly better this month (-6.2%) compared to its year-to-date growth (-6.5%). A wide range of results was visible as some retailers like Abercrombie and Fitch struggled with a -32% drop in growth; other retailers like American Eagle saw sales growth drop by -11% this month.
General Merchandise Stores faced a blip as growth in sales dropped -3.9% for June, underperforming in comparison to the year-to-date results (-0.8%).
Two sectors appear to be taking longer to plateau in this economic turmoil. Department Stores (excluding leased departments) are still struggling as sales dropped by -11.0% compared to -7.7% year-to-date. In addition, Electronics and Appliance Stores saw growth drop by -10.2%, versus -8.7% year-to-date.
While Electronics and Appliance Stores and some Department Stores may have to rough it out longer than other sectors, the stabilization of June sales growth for many is reason for optimism.
The National Retail Federation is predicting positive sales in the fourth quarter of this year. With Back-to-School right around the corner, retailers will be gearing up to make this happen sooner than later.
Join us next month as we take a special look at the Back-to-School market and monitor whether the recession’s plateau is here to stay.
Release Date of the Next National Retail Bulletin: August 13, 2009
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Please note:
The J.C. Williams Group National Retail Bulletin compares the latest monthly release of “raw” (i.e., unadjusted for seasonality, holiday, and trading day) retail sales figures to those in the same calendar month of the previous year. The U.S. Census Bureau also reports seasonally adjusted sales that are compared to the previous month within the current calendar year to measure change in Gross Domestic Product (GDP). Although other sources use seasonally adjusted figures, J.C. Williams Group believes that using raw figures and making comparisons to the previous year’s performance more accurately reflects the seasonality of the retail industry, and therefore, are more useful in analysis. Definitions can be found on the U.S. Census Website: www.census.gov.
