U.S Chain Store Sales Up 2.1 Percent in October

U.S Chain Store Sales Up 2.1 Percent in October
Luxury market shows first positive reading since May 2008
November 06, 2009

By Jerilynn Kraus and Stacy Straczynski

U.S. chain store sales in October increased 2.1 percent on a same-store basis compared with the same period last year, representing the strongest reading since July 2008, when sales increased 3.3 percent, according to the International Council of Shopping Centers (ICSC).

"Further evidence of retail recovery continues to unfold as October comparable-store sales have outperformed the year-to-date reading in every category," Michael P. Niemira, ICSC chief economist and director of research, said in a media release. "The improvement in the stock market has had a significant impact on the affluent shopper's willingness to spend as the luxury market has shown its first positive reading since May 2008."Department store sales fell by 1.1 percent in October to follow a 2.3 percent decline from the previous month. Average monthly sales for the category total a negative 7.8 percent.

At J.C. Penney Co. Inc., same-store sales decreased 4.5 percent for the four weeks ended Oct. 31, compared with a 13 percent decrease for the four weeks ended Nov. 1, 2008. This is slightly better than the company's guidance for the period, which estimated same-store sales to decrease 5 percent to 8 percent. Total sales in October decreased 3.5 percent.At Macy's, same-store sales were down 0.8 percent for the four weeks ended Oct. 31, and total sales dropped 1.3 percent to $1.692 billion, compared with $1.714 billion for the four weeks ended Nov. 1, 2008. Meanwhile, same-store sales at Neiman Marcus were down 6 percent to $269 million for the four weeks ended Oct. 31, compared with $286 million for the four weeks ended Nov. 1, 2008. Total sales dropped 4.2 percent to $274 million year-over-year. At Saks Inc., same-store sales increased 0.7 percent for the four weeks ended Oct. 31, and owned sales increased 1.8 percent to $219.8 million, compared with $216 million for the four weeks ended Nov. 1, 2008.Things continued to look bright in the discount, drug and wholesale store sectors in October. Discount stores posted an overall increase of 2.5 percent (excluding Wal-Mart, which reports its data on a quarterly basis). This marks the category’s second consecutive month of gain and follows a 0.5 percent increase in September.

Target reported 2.8 percent growth in net retail sales for the four weeks ending Oct. 31 to total $4,541 million; however comparable store sales fell slightly (0.1 percent). Overall, the company has seen 1.4 percent growth during the third quarter of 2009, but represents a year-to-date loss of 0.3 percent.

Drug store sales increased at 3.4 percent, similar to the 3.7 percent uptick experience the previous month. The category has shown growth since March 2009, although those amounts fluctuated greatly from month to month.

Wholesale clubs posted the greatest gains at 4.3 percent. This marks the sector’s third consecutive month of gain and a significant increase over previous months (0.8 percent in September and 1 percent in August). The year-to-date monthly average is still down 2.7 percent overall, however 1.9 percent gains are shown when fuel sales were excluded.

Costco same store sales grew to $12.58 billion during its nine-week reporting period ending Oct. 31, reporting gains of 5 percent. Net sales grew 7 percent year-over-year, or $5.68 billion, during the four weeks ending Oct 31. Comparable domestic sales for the four-weeks grew 2 percent domestically and 17 percent internationally, while comparable sales totaled 3 percent and 7 percent respectfully. (Positive impact from foreign exchange and negative impact from gasoline deflation was excluded.)

Looking ahead, the ICSC expects U.S. chain same-store sales for November will increase 5 percent to 8 percent compared with November 2008.In addition, ICSC Research projects U.S. holiday sales for the November-December 2009 period will increase by approximately 1 percent based on either GAFO store sales or the ICSC's tally of major chain store sales. Shopping center sales are expected to increase by 1.8 percent this holiday season.

—Nielsen Business Media