U.S. Chain Store Sales Down 5 Percent in July

U.S. Chain Store Sales Down 5 Percent in July
August 07, 2009

Leaner inventories and a shift in state sales-tax holidays hampered U.S. chain store sales in July, which were off 5 percent on a same-store basis, compared with the same period last year, according to the International Council of Shopping Centers (ICSC).

Despite the dip in sales, however, July chain store sales were in line with the ICSC's expectations for the industry and were consistent with the recent trends seen in May and June, according to ICSC Chief Economist and Director of Research Michael P. Niemira.

"July sales were hampered by leaner inventories as retailers looked to clear out merchandise. Additionally, many states pushed their back-to-school sales-tax holidays into August as opposed to July of last year. This sales-tax-holiday calendar shift likely pared about 0.5 percentage points from July's sales growth," Niemira said in a media release.

At J.C. Penney Co. Inc., same-store sales decreased 12.3 percent for the four weeks ended Aug. 1, which was slightly better than the company's guidance for the period.

Total sales in July decreased 10.6 percent.

According to the company, sales during the month were impacted by a combination of a later start to the back-to-school selling period and the shift of several state tax-free shopping periods into this year's fiscal August, as well as by lower levels of clearance inventory relative to last year.

Women's apparel and accessories were the best performers in July, while children's apparel was the weakest, impacted by lower levels of clearance merchandise compared with the same period last year.

Geographically, the best-performing area was the Southwest, while the Southeast experienced the weakest results.

Over at Macy's Inc., same-store sales were down 10.7 percent for the four weeks ended Aug. 1, and total sales dropped 10.7 percent to $1.377 billion, compared with $1.543 billion for the four weeks ended Aug. 2, 2008.

For the second quarter ended Aug. 1, same-store sales were down 9.5 percent, and total sales were $5.165 billion, a decrease of 9.7 percent, compared with total sales of $5.718 billion in the same 13-week period last year.

For the year to date, Macy's same-store sales are down 9.3 percent, and total sales are down 9.6 percent to $10.364 billion, compared with $11.465 billion in the first 26 weeks of 2008.

Online sales (Macys.com and Bloomingdales.com combined) were up 7.9 percent in July, 9.4 percent in the second quarter and 12.7 percent for the year to date. (Online sales are included in the same-store sales calculation for Macy's.)

Meanwhile, same-store sales at Neiman Marcus dropped 27.3 percent to $195 million for the four weeks ended Aug. 1, compared with $268 million for the four weeks ended July 26, 2008. Total sales dropped 25.8 percent to $199 million year-over-year.

In the four-week July period, comparable revenues in the Specialty Retail Stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, decreased 25.5 percent. The company experienced weakness across all geographies and merchandise categories in the Specialty Retail Stores segment.

Comparable revenues at Neiman Marcus Direct in the four-week July period decreased 34.2 percent.

For the 13-week fourth quarter, same-store sales dropped 23.4 percent to $752 million, compared with $981 million for the 13 weeks ended July 26, 2008. Total sales dropped 21.8 percent to $768 million year-over-year.

For the year to date, Neiman Marcus' same-store sales dropped 21.4 percent to $3.58 billion, compared with $4.55 billion for the 52 weeks ended July 26, 2008. Total sales dropped 19.9 percent to $3.64 billion year-over-year.

At Saks Inc., same-store sales decreased 16.3 percent for the four weeks ended Aug. 1, and owned sales decreased 14.9 percent to $159.7 million, compared with $187.7 million for the four weeks ended Aug. 2, 2008.

The Saks Fifth Avenue stores experienced continued weakness across all merchandise categories during the month. Saks Direct and Saks OFF 5TH showed relative strength in July.

For the second quarter ended Aug. 1, same-store sales decreased 15.5 percent, and owned sales decreased 14.6 percent to $555.9 million, compared with $650.9 million for the second quarter ended Aug. 2, 2008.

For the six months ended Aug. 1, 2009, same-store sales decreased 22.4 percent, and owned sales decreased 21.6 percent to $1,171 million, compared with $1,493.3 million for the six months ended Aug. 2, 2008.

Looking ahead, the ICSC expects same-store sales for August will be off 4 percent year-over-year, with the later back-to-school shopping season and an improving underlying economy giving a small boost.

--Jerilynn Kraus, Nielsen Business Media