The coldest June in five years, according to Weather Trends International, clearly hurt sales of seasonal apparel and other merchandise, ICSC reported. If drug store sales are excluded, the Index would have reported a 6.8% drop. In addition, June 2008 saw $28 billion in tax rebates distributed to consumers, boosting sales.
"Despite this continuing dismal sales picture, there were some brighter signs beneath the surface that might be part of the consumer-spending recovery process," wrote Michael Niemira, ICSC chief economist and director of research. A number of chains reported gains, including Ross Stores (up 1%), TJX (up 4%), Fred's (up 1%), Baker's Footwear (up 3.1%), Buckle (up 9.6%) and Aeropostale (up 12%).
Drug stores were the only sector to report a gain, rising 2.2%. Apparel store comps dropped 9.3%. Department stores declined 9.1%, with luxury stores declining 12.2% from the previous year (its best comp performance since November). Discount-store sales declined 3.8%. Wholesale clubs reported a 6.2% drop, though saw only a 0.5% decline when fuel sales are excluded.
"June this year is on par with recent results, showing little support for the idea that the worst of the recession is over and that good news is about to appear in consumer behavior," wrote John Rand, director of retail insight for Cambridge, MA-based MVI in the company's monthly comparable store sales report. "There is still plenty of negative news for pessimism to feed upon, with unemployment still climbing, housing still far from a turnaround, auto companies in bankruptcy, and a miserable rainy kick off to the summer season in key regions of the country."
ICSC anticipates that July sales will decline 5% from the previous year, as seasonal clearance sales suffer from earlier markdowns and tighter inventory.
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