honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Friday, July 10, 2009

Retail sector limps through June


By Anne D'Innocenzio
Associated Press

Hawaii news photo - The Honolulu Advertiser

Shoppers wait to pay at Costco in Mountain View, Calif. Sharp sales declines for June caused by poor weather and job worries kept consumers away from summer staples.

ASSOCIATED PRESS FILE PHOTO | May 2009

spacer spacer

NEW YORK — After yet another weak month, retailers are preparing to fight for their share of crucial back-to-school shopping. But they may have to keep discounting to keep consumers coming in, given escalating job uncertainty.

Particularly worrisome in yesterday's same-store sales reports: Mall-based teen stalwarts like Abercrombie & Fitch were among those hit hardest.

Wal-Mart Stores Inc., the world's largest retailer, is expected to be a big winner as it woos young shoppers with trendy electronics and fashions, but its sales are no longer included in the monthly data.

"We don't see signs of recovery. This is not going to be a consumer-led boom anytime soon," said Michael Dart, a retail strategist and leader of private equity practice for consulting firm Kurt Salmon Associates.

Ken Perkins, president of retail consulting firm Retail Metrics LLC., agreed, noting that the June retail reports indicate that many parents will forgo brands in favor of the lower-priced items and will buy less.

"Instead of buying four pairs of pants, they will buy three or two," Perkins said. "There will be a continued focus on need-based and discounted items."

Retailers in all sectors reported weak same-store sales for June, but mall-based clothing stores suffered most compared with a year earlier, while some discounters scraped by. Same-store sales — sales at stores open at least a year — are considered a key indicator of a retailer's health.

Even low-priced Costco Wholesale Corp. saw same-store sales decline compared with last June, when federal stimulus checks helped business.

The International Council of Shopping Centers-Goldman Sachs same-store sales tally for June was down 5.1 percent, worse than the latest forecast for a 4.5 percent decline. The results were slightly worse than the sluggish average declines of 4.4 percent seen since February.