US retail sales increase most in two months
NEW YORK - US retail sales rose the most since early May last week as Independence Day sales enticed consumers to buy warm-weather apparel.
Sales at stores open at least a year advanced 2.3 percent last week, the New York-based International Council of Shopping Centers said yesterday. Same-store sales probably increased 2 to 2.5 percent in June, bolstered by discounters and warehouse clubs, the group said.
Even as summer clearance sales and federal tax rebates helped drive consumers into stores this month, they didn't significantly bolster spending beyond necessities as gasoline exceeds $4 a gallon, home values tumble, and food prices soar.
"Rebate checks and 'pent-up demand' are both short-lived phenomena, and we cannot ignore the overall macro concerns and the pressures facing shoppers," Adrienne Tennant, a retail analyst at Friedman, Billings, Ramsey & Co., wrote yesterday in a research note. "We noted more people bargain-hunting the clearance racks and carrying fewer shopping bags."
Wal-Mart Stores Inc. and Costco Wholesale Corp. may have "disproportionately" benefited from federal tax-rebate checks spent in June, Craig Johnson, president of Customer Growth Partners LLC, a New Canaan, Conn.-based retail consulting firm, said Monday.
"The environment is tough, there's no question about it," Staples Inc. chief financial officer John Mahoney said yesterday. "We talked at the end of our last quarter about how we expected the economy would remain weak through 2009 and that's not changed for us."
Customers at Staples, the world's largest office-supplies retailer "are buying a little bit less and being a little bit more careful," Mahoney said.
June same-store sales probably increased 3.3 percent at general-merchandise chains such as Wal-Mart and warehouse club Costco, and declined 5.7 percent at department stores, Citigroup Inc. said Sunday.
Wal-Mart rose $2.20, or 3.9 percent, to $59.11 in New York Stock Exchange composite trading. The shares have gained 24 percent this year, while the 29-member S&P 500 retailing index has fallen 13 percent.
US retailers used Father's Day on June 15, the Fourth of July, and tax rebates to offer "aggressive" promotions and higher discounts than in 2007, Citigroup analyst Deborah Weinswig wrote.
Same-store sales in the seven days ended July 5 climbed 0.2 percent from a week earlier, the ICSC said. Sales performance was "uneven" by retailer, ICSC chief economist Michael Niemira said in the group's statement. ICSC tracks sales at about 40 chains.
Another gauge of retail performance found that sales rose 2.9 percent last week from a year earlier.
For June, sales gained 2.6 percent, compared with a 2.8 percent target, according to the Johnson Redbook Index released yesterday. Johnson Redbook tracks sales at about 9,000 stores.
The US government issued $78.3 billion of tax-rebate checks through June 27. US consumer spending, which accounts for two-thirds of the economy, rose 0.8 percent in May and incomes grew 1.9 percent, the most in almost three years.
US consumers still face a weak labor market that has seen six consecutive months of job losses. Confidence among US consumers fell in June to the lowest level in 28 years, according to the Reuters/University of Michigan survey released June 27.
