Retail same-store sales held steady with a 4.9% gain in August as retailers reported mostly solid back-to-school results at the same time sales were hurt by the impact of Hurricane Irene and weaker spending plans by shoppers, according to Kantar Retail.


While mass retailers such as BJ’s reported a mostly positive hurricane impact as shoppers prepared in advance of the storm, apparel and traditional department stores such as TJX and J.C. Penney lost sales as stores closed and shoppers stayed home during and after the storm.

 
The sales-weighted composite for the 26 retailers reporting-most of them apparel retailers-was about the same as the 4.8% same-store sales gain last month and better than the 3.1% gain in August of 2010. Note that the calculations no longer include Walmart, which stopped reporting monthly results in April 2009. 

The August results exclude Neiman Marcus, Walgreen and Hot Topic, which had yet to release results at the time of this report.

“Shoppers are clearly moving to curb their spending, although it’s hard to see amid the impact of the hurricane and unavoidable back-to-school spending,” said Frank Badillo, Senior Economist. 

The results were led by stronger-than-average results at Food, Drug and Mass retailers.  Lagging well behind were Apparel and Accessory Stores and Department Stores, which were hurt most by the hurricane. 

 

In coming months, same-store sales should reflect the weakening trend evident in shopper spending intentions as tracked by Kantar Retail’s ShopperScape survey.  The letup in spending intentions is not as severe as the drop-off in measures of consumer confidence recorded in August.

Kantar's survey of consumers found the following:


  • The percentage of shoppers planning to spend less in the coming month edged higher in August to just above 38% (as measured by a three-month moving average). 

  • The shift toward spending less came mostly at the expense of shoppers planning to spend about the same in the coming month.  They slipped to just less than 52% of all shoppers. 

  • The percentage of shoppers planning to spend more in the coming month held nearly steady in August, edging higher by an insignificant amount.

  • The signs of weaker spending ahead are not surprising given the broad deterioration in shoppers’ perception of their financial health.

  • Job security is the only measure in which shoppers’ perception of their financial health showed any improvement in August.  Slightly fewer households feel worse off this month compared with last month.  But most of the shift was toward no change in job security. 

  • All the other measures of financial health either deteriorated or stayed the same compared with last month and compared with last year.  

  • The deterioration in perception of financial health is worst in terms of value of investments followed by home values, both of which deteriorated significantly both versus last month and the same time last year.

  • Despite the negative trends, the outlook for the holiday remains better than it was coming out of the last recession, based on an early read of holiday spending plans.

  • Thirty-five percent of shoppers plan to spend less on holiday gifts compared with last year.  That’s better than the 43% who planned to spend less in August of 2009.

  • Half of all shoppers plan to spend about the same on holiday gifts compared with last year.  That’s 5 percentage points better than was the case two years ago.

  • Nine percent of shoppers plan to spend more this holiday, slightly better than the 7% who planned to spend more in August of 2009.