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All Stores sales fell by -1.7% this month, softening the 2009 year-to-date average to -8.2%. Excluding the Automotive categories, sales were only down -0.5% for October. While overall retail sales were good, the results varied greatly amongst retailers. There was also the expectation that sales performance should have been better given the poor results last year at this time.
Showing reluctance to invest in their homes, consumers still shied away from the home improvement stores. Building Material and Garden Equipment Stores were hard hit in October, with sales down by -16.6%. Faring better but still in deep negative territory, Furniture, Home Furnishings, Electronics and Appliance Stores were down only -7.5% this month. This is an improvement over their year-to-date decline of -10.9%.
Department Stores (excluding leased departments) also saw negative growth at -2.8% for the month. Some retailers performed better with same-store sales: Nordstrom had sales growth of 6.5% and Saks Inc. experienced a growth of 0.7%. Others like Macy’s and J.C. Penney were hit harder with a decline in same-store-sales of -0.8% and -4.5% respectively.
Food and Beverage Stores were up 1.3% for the month, outpacing its year-to-date flat sales.
General Merchandise Stores remained above the fray, with sales growth of 2.2%. Target however, saw same-store-sales decline by -0.1%, while Costco sales grew by 3.0% for the month.
Sporting Goods, Hobby, Book and Music Stores were up 3.0%. Of note, Book Stores in particular performed well over the past nine months, with a growth of 9% in sales.
Clothing and Accessories Stores sales grew by 3.6% for October. A similar theme resonated within this category, as some retailers secured a gain in sales growth while others saw a decline. Abercrombie and Fitch continued to experience double-digit sales loss (-15%), while Aeropostale and Gap Inc. grew 3.0% and 4.0% respectively.
Health and Personal Care Stores continued to experience moderate sales growth of 3.8%. Walgreens reported similar results with a sales growth of 4.9% for October.
October sales results reinforce that the retail sector is not out of the woods just yet. Consumer confidence has dropped 5 points to land at 48 points.
While holiday sales are forecasted to grow 0 to 1% this year, many retailers will be taking on extra precautions to cut back losses, such as limiting inventory. There is a worry that many retailers will be out of stock, negatively affecting sales. On the other hand, in the online sector, retailers will continue to see increased usage of the online channel with an augmentation in cross-channel behavior.
Join us next month, as consumers are expected to shop early to get in on Thanksgiving sales and retailers look to recoup on lost revenue from the past year.
Release Date of the Next National Retail Bulletin: December 11, 2009
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For more information, please contact Jim Okamura at (312) 673-1254, John Archer (416)921-4181 or e-mail or info@jcwg.com; Website: www.jcwg.com
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.
