April 20, 2024

Retail Sales Rose in May but Fell Short of Forecasts

Sales at discount stores that have been open at least a year grew by 7.8 percent in May, the best showing by any group of retailers in terms of sales last month, according to a survey of 24 retailers released on Thursday.

But the overall measure of what are known as same-store sales, compiled by Thomson Reuters, rose 4.9 percent on average in May, slightly below the 5.4 percent that analysts had forecast. It was also below the 8.9 percent growth in April, which was one of the biggest increases in the index in the last few years.Analysts said the May figures reflected the continued pressures on consumers from an uncertain jobs market, depressed housing sector, and the recent rise in gasoline prices. But retailers have tried to adapt to attract buyers who are still conservative about how much they open their wallets, and where.

Sherif Mityas, a partner in the retail practice at A.T. Kearney, a global management consulting firm, called the results “a bit underwhelming.”

“In totality we are still seeing significant headwinds from a consumer confidence perspective,” said Mr. Mityas. “You are seeing that show up in consumer retail sales.”

The monthly survey of same-store sales is used as a gauge for buoyancy in the retail sector and the strength of consumers, whose ability to spend is seen as a reflection of any progress in the economic recovery.

The survey fell a day ahead of the Labor Department’s monthly report on the jobs market. Analysts are forecasting an unemployment rate of 8.9 percent, down from 9 percent, and the addition of 170,000 jobs in May, although other jobs data this week has raised some concerns about whether those expectations will be met.

Economists said higher food and gasoline prices, although they have been moderating recently, have taken their toll on retailers in the United States. With people out of work and a depressed housing market, “people are feeling less confident about where their money is going,” Mr. Mityas said.

“The American consumer is still unfortunately focused on their needs when they open their wallet,” he said.

Still, the Thomson Reuters survey also suggested that while discount consumers were seeking bargains, higher end consumers were feeling less of a pinch. Retail sales at department stores rose 3.8 percent, but that was below the 4.5 percent increase expected. Apparel for teenagers also did well, climbing 4.5 percent overall, slightly above expectations of 4.2 percent.

Another survey of chain store sales from the International Council of Shopping Centers released on Thursday also suggested, as the Reuters survey did, that consumers on the high and low ends of the income scale were doing the most shopping. Neither survey includes Wal-Mart.

“The fact that luxury stores are plowing ahead gives some credence to suspicions that the high-end American consumer is pulling out of the recession relatively well, while the rest are having their incomes swallowed up by higher food and gasoline prices,” said Chris G. Christopher Jr., the senior principal economist for IHS Global Insight.

“In addition, shoppers are increasingly shopping for clothing from discount stores and staying away from the more expensive apparel outlets,” he said, commenting on the ICSC survey.

The Thomson Reuters survey accounts for sales in the four weeks through May 28. It quoted some retailers as saying that unseasonably cool and wet weather in the beginning of the month hurt traffic, but as the weather turned warmer near the end of the month, business picked up.

In the Thomson Reuters analysis, same-store sales at Saks showed the best increases of individual retailers, with a 20.2 percent jump in May, followed by Costco’s 13 percent rise.

Saks said in a statement that a four-day sales event helped push up May’s calculations. Macy’s reported same-store sales were up 7.4 percent. The department store said in a statement that it was raising its guidance, with same-store sales rising by about 5 percent in the second quarter from the previous estimate of about 4 percent. Macy’s includes online sales in its same-store sales calculations. Mr. Mityas said Saks and Macy’swere pursuing consumers with better pricing and merchandising.

“They are clearly setting the bar,” he said.

Nordstrom was up 7.4 percent.Among the companies that missed forecasts by the biggest margin were Destination Maternity, which showed same-store sales declining by 8.6 percent, the worst drop of the 24 retailers, worse than the decline of 1 percent forecast by analysts. J.C. Penney, which had been expected to show a 3.3 percent rise, fell by 1 percent. Gap Inc and Stage Store also fell short of forecasts.

Teen retailers The Buckle Inc and Zumiez Inc. beat expectations, with same-store sales rising 7.8 percent and 8.8 percent in May.

Article source: http://feeds.nytimes.com/click.phdo?i=a1454c30e69304fa48d06dfe794b6ba1

Speak Your Mind