Two pieces of same store retail sales were released today – one from the International Council of Shopping Centers (ICSC) and the other from the Bank of Tokyo – Mitsubishi (BTMU) showing same store sales increases in September 2010.
Normally, Econintersect would not be looking closely at same store sales – as it is a slightly distorted view of overall retail sales. It does not take into consideration bankruptcies or new store openings.
And now since the 600 pound gorilla Walmart no longer reports monthly, same store sales data has lost a lot of value. However, as Econintersect is on a recession watch, we are looking under more rocks to confirm or contradict this watch. Retail sales are a major component of GDP which is used by many to gauge the economy.
This data continues to confirm a slowing market, but is not recessionary.
Starting with BTMU September 2010 headlines:
Same-store sales in September came in under expectations, up +2.1 percent on a year-over-year basis, based on BTMU’s tally of over 30 chain-store retailers representing more than $35 billion in total sales. The September result came in at the low-end of the sideways trend in sales that emerged in late 2009. Since January of this year same-store sales growth has averaged 2.9 percent, moving within a tight band of 2 to 3 percent.
Sales in September were supported by late back-to-school shopping, but were hurt by unseasonably warm weather, which held back purchases of new cold-weather fall items. For the most part, discounters fell out of favor in September while mid-price to luxury stores did quite well. This is an important shift in spending behavior that certainly points to a better outlook on the part of households.
Looking ahead, most big box retailers are expecting same-store sales in the low single-digit range next month as annual comparisons are getting tougher. In October 2009 same-store sales increased by +1.8 percent.
The ICSC also released September 2010 data which showed same store sales increasing 2.6%. The news release stated in part:
Growth, however, is lagging. Same-store sales rose about 3 percent over the summer, and September’s increase is the smallest since May, according to ICSC.
Analysts expected September to get a boost from late back-to-school shopping, though some of those purchases could simply eat into October sales. “We think it could be tough” for October to sales to outperform last month’s, wrote Amy Noblin, a retail analyst for Weeden & Co.
Luxury retail enjoyed the biggest jump of any sector, up 6.6 percent. ICSC Chief Economist Michael P. Niemira said consumer confidence has increased significantly among high-income households, driving the gains. Meanwhile, sales at discount stores inched up 1.2 percent.
The data from both BTMU and ICSC confirm each other – and are predicting a weak October.