Retailers boast best results in over year
NEW YORK -- The arrival of summer weather prevailed over consumers' worries about rising oil prices last month, sending shoppers into stores and delivering retailers their best performance in more than a year.
As merchants released their better-than-expected June sales figures, even recent laggards like Wal-Mart Stores Inc. had strong results. The winners were from a range of retail sectors, including discounters and wholesale clubs such as Costco Wholesale Corp. and Target Corp., department stores like Nordstrom Inc. and J.C. Penney Co., and teen retailers such as Abercrombie & Fitch Co. A handful of companies, including TJX Cos., had disappointing results, but they were the exceptions. Framingham-based TJX had a modest 3 percent same-store sales gain.
Overall, ''the final results were terrific," said Ken Perkins, president of Retail Metrics LLC, a research firm in Swampscott, Mass. ''There was broad-based strength across all retail segments."
He added, ''Consumers clearly seemed to shrug off higher oil prices. And it didn't seem to bother the low-income consumers."
Terror attacks rocked London yesterday, creating a possible source of anxiety for US consumers. But Perkins foresees no big impact on US retailers as long as there are no more attacks.
Another big concern, the job market, showed signs of improvement.
The Labor Department reported the number of people signing up for initial unemployment benefits rose by a seasonally adjusted 7,000 to 319,000 for the week ended July 2, but the increase was mostly due to layoffs related to temporary shutdowns at auto plants and school closings.
A better measure is the four-week moving average of new jobless claims, which smooths out week-to-week fluctuations. That figure dropped last week to 320,500, its lowest level since early March.
The International Council of Shopping Centers-UBS sales tally of 70 stores surged 5.3 percent in June, surpassing the 4.5 percent forecast and the industry's best showing since May 2004, when the index was up 5.7 percent, according to Michael P. Niemira, chief economist at the council.
The tally is based on same-store sales (stores open at least a year). Same-store sales are considered the best indicator of a retailer's strength.
June -- the second most important month of the year in a retailer's calendar, after December-- is a period when merchants clear out summer goods to make room for fall.
Niemira noted that June's strong sales gain was helped in part by easier comparisons with June 2004, when the tally had a weaker 3.0 percent increase.
Still, June's performance was a relief for retailers, who had only modest increases during the March-May period.
