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April showers and May flowers did not delight consumers in June, as confidence dropped 10 points from last month, landing at 53 points. With a 9.5% unemployment rate and continued debate on whether extending unemployment benefits slows or spurs recovery, consumer confidence is fragile at best during this time.
While All Stores sales were up 4.9% for the month, lagging year-to-date growth (6.5%), All Stores Less Automotive-related retail was simply on par, increasing on average by 4.0%.
Few retail categories experienced exceptional sales growth in June, however three categories came out on top.
Online merchants continue to shine through consistently with strong results, while overall sales of Nonstore retailers in June grew by 11%.
Electronics and Appliance Stores sales were up 7.6%. With the debut of the iPhone4, consumers got their share of exciting gadgets for the month, although Best Buy comparable store sales only grew 2.8% during their last quarter.
Clothing and Accessories Stores also held up well, increasing sales by 6.1% amidst high temperatures that brought consumers indoors to stores. With some heavy promotions to assist, Abercrombie and Fitch beat the category average, growing same-store sales by 9% for the month.
General Merchandise stores provided lackluster growth of 2.8% while Department Stores (excluding leased departments) only grew by half a percent in June. However, there were some exceptional results from retailers like Nordstrom, whose comparable store sales grew 14.1% that month. Other retailers such as Macy’s had approximately half the growth, with a 6.5% increase in same-store sales.
Sales at Building Material and Garden Equipment Stores increased by 3.6%. These results are positive amidst an erratic housing market that is dealing with the end of the federal homebuyer tax credit and the lowest monthly housing starts seen to-date.
Sporting Goods, Hobby, Book and Music Stores sales were up by 2.0% for the month.
Food and Beverage Stores had moderate growth of 1.9%, while Health and Personal Care Stores sales were up by 2.2% in June.
As we head into Back-to-School season more aggressive and creative marketing strategies are likely to develop from retailers. With consumer confidence changing direction frequently and an economy that is recovering at a snail’s pace, retailers are wise to continue to assess how to meet their customers’ needs.
Join us next month to see if consumer confidence has increased and what retailers can look forward to with Back-to-School.
Release Date of the Next National Retail Bulletin: August 13, 2010
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Chicago Office: 350 West Hubbard St. Ste. 240, Chicago, Il. 60654 Tel: (312) 673-1254 Fax: (312) 822-9162
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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.
