September Comp Sales Signals Improvement, but…

 

Still, the small increase had a big impact on the market and was seen as a psychological turning point for the retail industry -especially since it marked the first year-over-year comp store increase since July 2008 when the retail market comped up 3.3%.

Industry-wide, ICSC previously estimated that the impact on the entire industry's sales pace from the later Labor Day was likely to boost year-over-year sales by about 25 basis points, but now figure it was probably worth as much as three times that magnitude. Offsetting much of this positive back-to-school lift, however, was a drag on reported sales from lower gasoline prices at wholesale clubs.

Excluding Drug Store sales overall comps were down 0.9% for the month.

The shift from luxury to discount continued in September as the Wholesale Club segment posted a 4.2% increase excluding fuel sales (+0.8% with fuel sales included) and Luxury Department Stores posted an 8.5% decline for the month.  The Wholesale Club gain was driven by Costco (+1.0%), but that increase had its own asterisk as a 6% increase in international sales for the retailer offset a 1.0% decrease in U.S. comps.  Excluding the impact of fuel sales, Costco comps were up 3% in the U.S. for the month.

On the Luxury side, Neiman Marcus continued to spiral downward, posting a 16.9% decrease in September on top of a 12.9% decline in the year-ago period.  Saks, Inc. also posted a double-digit decrease for the month, nearly matching the fall from the year-ago month.   As for the rest of the Department Stores group, the declines for the month were actually an improvement versus the year-ago month and more recent declines and Dillard’s, Macy’s and Nordstrom all narrowed their declines. 

 

 

The improved results posted by many retailers for the month of September are not as good as they might seem.  The International Council of Shopping Centers suggested that the shift in the Labor Day holiday to the second week of September may have as much as a 75 basis point impact on comparable store sales for September, but the impact may be far more for retailers that count on sport footwear sales for the back-to-school period.  With the consumer more focused than ever on a buy now-wear now attitude toward shopping, the move had a demonstrable impact on September sales on sport footwear.

According to retail point-of-sales data compiled by SportScanINFO, retail sales of sport footwear increased in the mid-single digit range for the five-week fiscal month of September ended October 3.  Sport footwear sales, which includes both athletic footwear and outdoor footwear, were up in double digits at full-line sporting goods, sport specialty and family footwear retailers and a mid-single-digit gain in the mid-tier department store sector, while the mall retailers posted a low-single-digit decline, which a solid improvement from the year-to-date trend and the second quarter.

The reported results for the month do not accurately reflect the retail marketplace as the increase for the month received a considerable boost from the aforementioned Labor Day move. With Labor Day falling a week later this year, the week before Labor Day (August week four last year) shifted into September this year.  With so many Northeast schools starting the week after the holiday, the numbers can be confusing.  Many retailers are combining the months of August and September to more clearly assess the trends.

“If we align the weeks of 2008 versus the comparable calendar weeks of 2009, sales for the month of September were down in the high singles, making September the worst month of the year,” commented Matt Powell, chief retail analyst for The SportsOneSource Group, in a research report.  “If we shift August and September combined to the same calendar weeks, sales are flat for the two month period, again the worst performance of any two months combined this year.”

The big news in sport footwear continues to be the growth of the toning/wellness footwear category, which showed week over week sequentially growth even in the face of declining weekly sales for the industry.

The balance of the business was generally weaker for the shifted calendar.  Running sales were flat for the month, but were down in the mid teens accounting for the holiday shift as the fashion running business — by Nike Shox — has gotten considerably weaker.  Fashion running declined in the high singles (down strong double digits, shifted) as Shox has gone cold. Performance running grew in the mid teens (up low singles, shifted).

Basketball grew in the high singles (down high singles shifted).  Performance Basketball declined in the mid singles, but was down more than 20% shifted); Fashion Basketball grew in the mid teens (down mid singles shifted).

Lifestyle was up in the low-single digits (down low teens shifted).  Classics dropped in the mid singles — down high-teens when accounting for the shift, as Nike Air Force 1 slow here as well.  Converse is on fire here with Chuck Taylor’s and K-Swiss has seen the second straight month of flat sales growth, which represents a rebound for the brand.

The Skate business grew more than 20% for September (down high singles shifted) as DC, Nike and Adidas all logged strong sales growth.
Powell sounded a rather contrarian tone when assessing the prospects for the Holiday period ahead.  “My expectations are that Holiday sales will be worse than last year, as retailers and brands are in much better control of their inventory than last year, resulting in less clearance,” he noted.

 

 

Zumiez Inc. reported that comparable store sales decreased 0.8% for the five-week fiscal month of September on top of a 9.0% decrease in the year-ago month.  Total net sales for the month ended October 3 increased 8.4% to $36.5 million from $33.6 million in fiscal September last year.

Comps were up 0.7% in week one, but jumped 29.1% in week two on the shift in the Labor Day holiday, but then declined 13.7%, 13.0% and 8.3% for weeks three through five, respectively.

Due to the holiday shift and the negative impact on August sales and the positive impact of September, Zumiez also reported a combined nine-week period. 

Comparable store sales for the nine-week quarter-to-date period decreased 7.7% on top of a 3.6% decrease for the same period last year. The decrease was said to be driven by a decrease in comparable store transactions.  dollars per transaction was up for the period due to an increase in units per transaction, somewhat offset by a decrease in average unit retail.

By region, stores in the western half of the U.S. comped down in the low double-digit range, while stores in the South, Midwest and Northeast comped down in the mid-single-digit range. Footwear reportedly posted a modest positive comp offset by negative comps in all of the other departments.