11 Oct Retail sales growth ‘modest’ in September but misses forecasts
Retail sales during the prime back-to-school shopping month of September grew compared to last year but were still muffled by heavy head winds.
The gauge of same-store sales, which calculates sales at stores open for more than a year, rose “a modest” 4 percent compared to September 2012, according to Retail Metrics Inc.
But Ken Perkins, president of the research firm, had projected a 4.1 percent upswing. Without the strong performance of drugstores _ Walgreens’ sales soared 7.4 percent last month _ the retail sales measure increased 2.8 percent.
In a note to clients, he blamed the shortfall on warmer-than-expected temperatures, the threat and then reality of the government shutdown, 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 percent surge in September.
But L Brands was weaker, falling short of expectations to grow sales by 1 percent.
“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.
The back-to-school selling season was “sluggish,” he said.
Shoppers are spending strongly on big-ticket items, such as autos, home furnishings and appliance. 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 3.7 percent uptick despite projections for a 4.5 percent expansion.
Excluding Walgreens and Rite Aid, the gauge rose 2.2 percent on a forecast for a 3.1 percent rise.
The teen apparel sector was especially struggling, with sales tanking 3 percent last month. Thomson Reuters had expected a 0.5 percent boost.
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