Retail sales strong in June
NEW YORK — The arrival of summer prevailed over consumers’ worries about rising oil prices last month, sending shoppers into stores and giving retailers their best performance in more than a year.
As merchants released their June sales figures Thursday, even recent laggards like Wal-Mart Stores Inc. had solid results. The winners were from a range of retail sectors, including discounters, wholesale clubs such as Costco Wholesale Corp. and Target Corp., department stores like Nordstrom Inc. and J.C. Penney Co. Inc. and teen retailers such as Abercrombie & Fitch Co. A handful of companies including TJX Cos. Inc. and Family Dollar Inc. had disappointing results, but they were the exceptions.
Overall, “the final results were terrific,” said Ken Perkins, president of Retail Metrics LLC, a research firm in Swampscott, Mass. “There was broad-based strength across all retail segments.”
He added, “Consumers clearly seemed to shrug off higher oil prices. And it didn’t seem to bother the low-income consumers.”
A series of terror attacks rocked London Thursday, creating a possible source of anxiety for U.S. consumers. But Perkins said he forsees no big impact on American retailers as long as there are no other attacks.
The International Council of Shopping Centers-UBS preliminary sales tally of 66 stores surged 5.3 percent in June, better than the 4.5 percent forecast and the industry’s best showing since May 2004, when the index was up 5.7 percent, according to Michael P. Niemira, chief economist at the International Council of Shopping Centers.
The tally is based on same-store sales, or sales at stores open at least a year. Same-store sales are considered the best indicator of a retailer’s strength.
June — the second most important month of the year in a retailer’s calendar after December— is a period when merchants clear out summer goods to make room for fall merchandise. With clean inventories behind them, the nation’s stores should be able to make the transition to the back-to-school selling season more easily, Perkins said.
Niemira noted that strong sales gain in June was helped in part by easier comparisons with June 2004, when the tally had a weaker 3.0 percent gain.
Still, June’s performance was a relief for retailers who had only modest increases the past three months, when lower-than-normal temperatures hurt demand for seasonal merchandise including clothing. Although oil prices passed $60 a barrel for the first time last month, consumer confidence rose to better-than-expected levels as shoppers shrugged off energy’s advance and focused on an improving job market.
The latest report on unemployment claims, released by the Labor Department Thursday, indicated that the job market is indeed recovering.
While the number of new people signing up for unemployment benefits rose last week, it was mostly due to layoffs related to temporary shutdowns at auto plants as well as school closings. A better measure is the four-week moving average of new jobless claims, which smooths out week-to-week fluctuations. That figure dropped last week to 320,500, a decrease of 3,500 from the week before. That decline left the four-week moving average of new claims at its lowest level since early March.