Retail Execs’ Outlook Brighter than July Results…

The July survey of Retail Executives conducted by the National Retail Federation again appeared to differ a bit from the realities of the comp sales results for the month as the view in the corner office brightened for the opportunities for both the near-term and the six-month outlook. The result of the monthly survey was a direct opposite result of the June survey, when execs appeared to be concerned with the current business despite a strong June comp sales report.

According to the most recent NRF Executive Opinion Survey, a monthly index by the National Retail Federation, the Retail Sector Performance Index (RSPI) for July rose 2.4 points from the June reading, but was off 310 basis points from July 2004. The RSPI measures retail executives' evaluations of a number of key metrics and is based on a scale of 0.0 – 100.0 with 50.0 equaling normal.

In contrast to June, when traffic was up and sales were up just slightly, the survey respondents saw traffic remain below normal with a reading of 46.9, but sales took a giant step forward, increasing 6.4 points from June to 53.1. The average transaction per customer metric jumped 10 full points after falling 11 points in the June report. Perhaps the real indicator of the retail landscape is the fact that respondents saw the sales index eight full points below July last year.

The employment picture brightened from June, but the inventory index declined a bit from both June and July 2004, though it stayed in positive territory. The good news is that the executives surveyed continued to take a more positive approach to their outlook through the holiday selling season. The Demand Outlook, which measures the respondent’s six-month look-ahead view, increased another 110 basis points in July.