AddThis

After August comps gains, retailers should expect reduced spending

COLUMBUS, Ohio — Retail same-store sales held steady with a 4.9% gain in August as retailers reported mostly solid back-to-school results at the same time sales at department stores were hurt by the impact of Hurricane Irene and weaker spending plans by shoppers, Kantar Retail reported on Thursday. However, shoppers plan on reducing their spending over the next few months, the company reported.

“Shoppers are clearly moving to curb their spending, although it’s hard to see amid the impact of the hurricane and unavoidable back-to-school spending,” stated Frank Badillo, Kantar senior economist. The percentage of shoppers planning to spend less in the coming month edged higher in August to just above 38% (as measured by a three-month moving average).

While food, drug and mass retailers reported a mostly positive hurricane impact as shoppers prepared in advance of the storm, apparel and traditional department stores, such as TJX and JCPenney, lost sales as stores closed and shoppers stayed home during and after the storm, the company stated.

The sales-weighted composite for the 26 retailers reporting — most of them apparel retailers — was about the same as the 4.8% same-store sales gain last month and better than the 3.1% gain in August of 2010. The calculations no longer include Walmart, however, as that retailer stopped reporting monthly results in April 2009, Kantar noted.

The August results also excluded Neiman Marcus, Walgreens and Hot Topic, which had yet to release results at the time of the report.

In coming months, same-store sales should reflect the weakening trend evident in shopper spending intentions as tracked by Kantar Retail’s "ShopperScape" survey. However, the letup in spending intentions is not as severe as the drop-off in measures of consumer confidence recorded in August, the company noted, and should recover in time for the holidays. A little more than one-third of shoppers plan to spend less on holiday gifts compared with last year, but that’s better than the 43% who planned to spend less in August of 2009. Half of all shoppers plan to spend about the same on holiday gifts compared with last year, and 9% of shoppers plan to spend more this holiday, slightly better than the 7% who planned to spend more in August 2009.

© 2014 Retailing Today. All Rights Reserved.