August sales boosted by strong back-to-school shopping
US retail sales in August were boosted by back-to-school shoppers, with most retailers booking sales gains over the month.
Retailers recorded a 5.4% gain over the month, exceeding expectations for the third time in four months, according to Retail Metrics.
The research firm's founder Ken Perkins said that consumers, given a reason to shop, "came out strong in August to snap up good deals and new fashion for kids headed back to school".
He said back-to-school 2012 looks to have seen a shift away from basics to more fashion-oriented apparel purchases, as well as a shift towards apparel and away from consumer electronics.
"Despite the headwinds of rising gas and food prices coupled with high unemployment, consumers shifted away from basics and snapped up a colourful assortment of apparel, skinny denim, and printed tops," he said.
Michael Niemira, chief economist and vice president of research at the International Council of Shopping Centers (ICSC), described back-to-school spending as "especially strong" in August, with sales propelled by "numerous state sales tax holidays and retailer promotions, which helped drive consumer traffic and sales."
Perkins added that August sales strength was "across the board" with 89% of its tally of US chain store retailers beating expectations and only 9% missing.
Macy's was one retailer to beat forecasts, recording a 5.7% increase in August sales to reach US$1.7bn, rising 5.1% on a same-store basis.
"Sales exceeded our expectations in August, and the strength was broad-based across merchandise categories, geographies and channels," said Macy's CEO Terry Lundgren.
"I am particularly pleased with our back-to-school results in the Millennial customer categories and our improved performance in feminine apparel. Men's apparel, home furnishings, beauty products, women's shoes and handbags continue to perform well. Our fall season is off to a healthy start."
Department store operator Nordstrom posted the biggest comparable sales gain, up 21%, which it attributed to delaying the launch of its Anniversary Sale event by a week. This meant that eight days of the event occurred in August, compared to one day in 2011.
Off-price retailers also reported continued strong growth, with both TJX and Ross Stores posting 8% comparable sales growth over the month. Ross Stores said revenue increased 13% to $747m, while TJX said sales increased 10% to $1.9bn.
"We are pleased with August same store sales that were ahead of our expectations," said Ross Stores vice chairman and CEO Michael Balmuth. "Our ability to deliver a wide array of name brand bargains for back-to-school shoppers drove healthy traffic to our stores during the month."
TJX also attributed its growth to traffic increases, with CEO Carol Mayrowitz saying that "customer traffic drove the comp sales increase across our divisions in the US, Canada and Europe, which we believe is a great indicator that our value proposition continues to resonate with consumers."
Only one retailer booked a decline during the month, with Wet Seal seeing sales tumble 15.9% to $48.8m. Comparable store sales declined 18.3%, with an 18.5% comparable store sales decline at Wet Seal stores, and a 16.3% decline at Arden B.
The teen clothier said the results were "in line with our expectations", adding: "Since the start of August our aggressive return to our core expertise of fast fashion merchandising has included merchandising to a broader demographic, including the young teen customer, sourcing a wider variety of product more directly from fast fashion vendors, committing to merchandise purchases closer to time of need, and focusing our price points on our core customer - all of which have long driven success at the company."
Looking to the future
Looking forward, ICSC's Niemira suggests that the sales pace will moderate slightly to 3-4% growth in September.
Meanwhile, Perkins expects that the solid traffic of the past week should continue through the Labor Day weekend, with sales tailing off in the back half of September and remaining "tepid through October into the first half of November as consumers take a breather before the Holiday shopping season".
On a cheering note, he added: "August/back-to-school sales should be a harbinger of a decent holiday shopping season".
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