School sales off to slow start
Clothing retailers face pressure to cut prices
NEW YORK – Shoppers are holding off on back-to-school shopping, and those who delay long enough might be rewarded with some steep discounts from desperate retailers.
Revenue at stores open at least a year – an industry measure of a retailer’s health – rose 3.8 percent in July, the slowest pace since March, according to a preliminary tally of 10 retailers by the International Council of Shopping Centers. The figure, which excludes drugstores, was below a 5.5 percent increase in June.
Costco Wholesale Corp., typically a strong performer, was among the retailers reporting disappointing figures.
Many stores were already offering discounts and other come-ons to get shoppers to spend on the new shipments of fall clothing that started flowing in mid-July. But experts say even more deals are coming this month as stores try to boost sales for the back-to-school season, which runs from mid-July through mid-September.
“It was a lousy start,” said Walter Loeb, a New York-based independent retail consultant. “There will be even more discounts to make up the sales.”
Ken Perkins, president of RetailMetrics LLC, a research firm, agrees.
“A vast number of shoppers are sticking to their shopping lists and are being very deal-driven,” he said.
July is when stores clear out summer merchandise to make room for goods for back to school. Slow sales indicate that shoppers are holding off on buying clothing as they face other expenditures. A heat wave helped clear out discounted summer goods but did little to move warmer fall clothing among shoppers who are sticking to what they need immediately.
Still, Michael P. Niemira, chief economist at the International Council of Shopping Centers, expects total sales for the back-to-school season will rise 3.1 percent from last year to $42.2 billion.
Families with school-age children are expected to spend an average of $634.78 on clothing, shoes, supplies and electronics, down from $688.62 last year, according to a survey of about 5,600 shoppers from the National Retail Federation that was conducted by Prosper Insights & Analytics.