There may have been few lonely bright spots twinkling through the haze of a languid May, but results were largely disappointing as the market made it clear to economists and analysts that any hints of recessional relief are just that — hints. With Wal-Mart (which seems to remain somewhat impervious to market challenges as others buckle) declining to report results for the month, the market came crashing back down to reality after a decent March and a respectable April that gave indications to some that the end was drawing near.
That doesn�t appear to be the case, however, as The International Council of Shopping Centers said same-store sales declined by 4.6% based on a tally of 32 retail-chain stores-1 point to 1.5 points worse than most analysts forecasted. Excluding Wal-Mart, May marked the tenth straight month that saw declining retail comps.
A survey conducted by the ICSC found that about one-third of the federal income tax rebates were spent last by June last year-boosting consumer spending by $10-$15 billion in May of last year and close to the same amount in June. This indicates that their may be some �lagged response� between rebates being received and being converted to discretionary income.
As has been the case in recent months, department stores continued to struggle, posting a mid-teen decline.
Although the reports were collectively weak, there were some bright spots or “green shoots” among the reporting firms. Ross Stores' CEO, for example, observed about his company's performance that “we are very pleased with our solid sales gains in May, especially given the difficult prior-year comparison.” Ross posted a 4% year-over-year same-store increase in May. Buckle was another stellar performer with its 13.4% gain in same-store sales in May. BJ's Wholesale Club's CEO also observed that its company's customer traffic “continued strong” in May driven by “continued strength in food and consumables [and] televisions and computer equipment.” JC Penny's and Kohl's reported that the southwest region performed best, while Stein Mart observed strength in its western region. Meanwhile, in May, the southeastern section of the country was comparatively weaker.
Looking ahead to June, ICSC Research anticipates that the sales will be down by between 3% and 4% from the prior year.
