Monthly Same-Store Sales of Major U.S. Retailers

U.S. Apparel Market Supported by Stimulus Package Monthly Report

11 July 2008

U.S. retail sales were stronger in June than previously expected, according to first data Thursday released by apparel chains, discounters and department stores. The stimulus package limited negative effects of falling housing prices and surging gasoline costs. Long-term data are however indicating a clear slowdown in clothing sales on the market. U.S. apparel groups will have to lower their prices while production costs are sharply rising in Asia and elsewhere.

U.S. retail sales were not so bad at apparel chains in June, according to first data Thursday released by listed companies.

The decline in sales was less abrupt than previously expected.

For example, sales only fell 7% at Gap Inc.'s stores opened at least a year ago (comparable sales).

In May, Gap's sales had decreased by 14%, by comparison.

Revenues were only down 2.40% at J.C. Penney, from a 4.40% decline in May.

Thanks to Checks

These not-so-bad results are mostly due to the checks which were sent to U.S. taxpayers in order to stimulate the economic activity.

Retail sales are currently depressed by the fall in housing prices in the United States and the surge in gasoline prices.

Not surprisingly, discounters got good results in June with Wal-Mart even announcing a 5.80% jump in comparable sales.

The world's largest retailer returned to the basics in the last year, offering lower prices in order to adapt to new trends in consumption.

With production costs significantly rising in Asia, U.S. apparel chains may find it difficult to sharply reduce retail prices in the near term, however.

Second Package in Sight

Market analysts fear a sharper fall in consumption after effects of the stimulus package will have waned.

The Democratic majority in Congress may prepare a second plan for revamping consumption.

Fed Chairman Bernanke however warned that impact of the first plan was not yet exhausted and there should be no rush for launching a second one.

Long-term statistics below clearly indicate this year's slowdown in sales at clothing stores.

Adjusted data did not improve for the first time in May.

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Sharp Decline in March Sales of U.S. Apparel Chains (14 Apr 08)

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Falling Apparel Sales in January, US Retailers Report (07 Feb 08)

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