Retail sales growth ‘modest’ in September but misses forecasts
Retail sales during the prime back-to-school shopping month of September grew but were still muffled by heavy head winds that could affect holiday spending.
The gauge of same-store sales, which calculates sales at stores open for more than a year, rose “a modest” 4% compared with September 2012, according to Retail Metrics Inc.
But Ken Perkins, president of the research firm, had projected a 4.1% upswing. Without the strong performance of drugstores — Walgreens’ sales soared 7.4% last month — the retail sales measure increased 2.8%.
Perkins attributed the shortfall to warmer-than-expected temperatures, the threat of the government shutdown (which began Oct. 1), a looming national default, meek consumer confidence, middling wage growth and an uninspiring fall fashion cycle.
Regional discount chain Steinmart was a solid performer, with a 5% surge in September.
But L Brands was weaker, falling short of expectations with a 1% increase in sales despite price cutting. L Brands owns chains including Victoria’s Secret and Bath & Body Works.
“Like many other retailers across the mall, they were forced to be more promotional than they would have liked due to sluggish traffic levels and soft economic growth,” Perkins wrote in a note to clients.
Shoppers are spending strongly on big-ticket items, such as autos, home furnishings and appliances. But the behavior may bode ill for the coming holiday season, “crowding out spending and leading to broader promotions across the mall,” Perkins wrote.
A separate retail sales summary from Thomson Reuters closely mirrored Perkins’ report.
The data, including drugstores, showed a 2.4% uptick despite projections for a 4.5% expansion.
Excluding Walgreens and Rite Aid, the gauge of nine companies rose 0.4% on a forecast for a 3.1% increase, making it the weakest showing since the recession, according to Thomson Reuters.
The teen apparel sector was especially struggling, with sales tanking 3% last month. Thomson Reuters had expected a 0.5% boost.
In yet another retail sales report, the International Council of Shopping Centers said that chain stores posted a 4% gain. Without gasoline sales, the tally was 5.1%, according to the trade group.
Drugstores, with a 6% sales increase, had their strongest showing since April 2007, when the segment got a 6.7% boost. Apparel was the weakest.
The trade group said it expects same-store sales for October to increase between 3% and 4%, but cautioned that the shutdown has “the potential to curb spending during the month.”
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