US retailers see only modest sales gains in May
Concerns over the rising cost of living weighed on US shoppers in May
After receiving a late Easter boost to sales last month, it was perhaps inevitable that US apparel retailers would see only modest sales gains in May, with many blaming cold weather, storms and flooding for dampening demand for spring and summer merchandise.
Others say concerns over the rising cost of living, including higher energy costs and climbing prices, combined with ongoing economic uncertainty, continues to weigh on consumers. Many are shopping cautiously as their household budgets come under increasing pressure and they have fewer discretionary funds to spend.
Mixed May sales were confirmed by the International Council of Shopping Centers (ICSC), which reported a 5.4% year-on-year same-store sales gain across retail chains in May. Excluding fuel, sales rose by 3.7% it said.
But within this, the weakest performer was apparel, with retailers here posting a sluggish 1% gain in May sales - well below the segment's year-to-date trend of 3.6%.
Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse, which follows retail sales across all payment forms, points out that while apparel continued to show gains in May, the growth rates were hurt by tough comparisons with April.
"Because the late Easter holiday boosted April's year-over-year comparisons in some sectors, the May growth rates can look flattened by comparison, especially in apparel, luxury, and groceries where the growth rates were only about half what they were in April," he said.
Though noticeably smaller than April's 10.4% gain, according to SpendingPulse figures total US apparel sales in May recorded a 5.9% year-over-year increase, its 18th monthly rise in a row.
All of apparel's sub-sectors posted higher sales than a year ago. Most noticeably, family apparel was up 3.6%, its 16th positive out of the last 17 months. And at 8.5%, footwear weighed in with its 18th consecutive month of higher year-on-year growth.
Retailers including Target, Dillard's, JC Penney, Kohl's, Hot Topic and Wet Seal all missed expectations for May sales. And Gap saw a decline across all brands including its namesake, Banana Republic and Old Navy.
While gasoline prices have declined from their peak, they remain a cause for concern in the second half of the year, not only by reducing the number of shopping trips that are made but also taking any 'extra' money out of shoppers' purses. Likewise, the industry continues to brace itself for the impact of rising cotton, transport and labour costs on apparel prices.
That said, there are hopes that warmer, seasonal weather will help drive sales of summer merchandise in the next couple of months - with those stores offering products that are good value and on trend most likely to emerge as the winners.
The Memorial Day holiday may also push some spending into June, and the upcoming Father's Day may well act as a catalyst too.
The following is a general roundup of US apparel and shoe retailers' November 2011 sales results....
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