July was a quiet and disappointing month for many of the nation's retailers, who were left with only modest sales gains after selling most...
NEW YORK — July was a quiet and disappointing month for many of the nation’s retailers, who were left with only modest sales gains after selling most of their summer merchandise during June. Consumers were more interested in spending at auto dealers than malls last month, and hot weather wilted sales of some early fall items such as sweaters.
Seattle-based Nordstrom posted a 3.6 percent gain in same-store sales — a key gauge of a retailer’s health that measures sales for stores open at least a year.
While sales were in line with the company’s prior guidance — and came on top of a challenging 7.4 percent increase in July last year — the upscale retailer fell short of the 5.4 percent average estimate by analysts surveyed by Thomas Financial. The news sent Nordstrom’s stock down $3, or 8.2 percent, to $33.45.
McAdams Wright Ragen analyst Dan Geiman wrote in a research report that Nordstrom’s July sales growth may have slowed due to inventory shortages in some locations during its Anniversary Sale, and its decision to consolidate its catalog offerings.
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“As for whether the July disappointment will carry forward, we tend to believe that won’t be the case, although we also wouldn’t be surprised if the euphoria of the past couple of years eases a notch or two,” Geiman said.
“Consumers’ focus isn’t rising gasoline prices, but where the best deals are. And in July, that deal was in motor vehicles,” Michael Niemira, chief economist at the International Council of Shopping Centers, said yesterday as merchants reported their monthly results.
Largely because of an employee-discount promotion, General Motors, Ford and DaimlerChrysler’s Chrysler Group saw their combined results climb 26.5 percent in July.
Still, while many retailers were disappointed by their July performance, their expectations for the month may have been too high. Although consumers spent robustly in June, they no longer shop way in advance of a new season, and so they were unlikely to start buying heavier clothing now.
Discounters and wholesale clubs such as Wal-Mart and Costco were among the winners last month, with business helped by sales of air conditioners and food.
Issaquah-based Costco reported same-store sales growth of 5 percent, helped by favorable currency rates and gasoline inflation. Analysts surveyed by Thomson Financial were expecting a 4.6 percent increase.
July’s results were below the 5.2 percent gain in June, but spending last month was still in line with the average of the first six months of retailers’ fiscal year.
In fact, despite rising gasoline prices, confidence remains high, and consumers seem to be getting used to the vagaries of the economy.
July is one of the least important months of the retailing year and is used by stores to clear out summer goods and start bringing in fall goods. But the period also serves as a good indicator of what will be the best sellers for the season.
Niemira said lingering hot weather in August would probably postpone the back-to-school season, but he said merchants shouldn’t panic.
“Any short-term weakness is a function of the weather,” he said.
Information on Nordstrom and Costco provided by Seattle Times business reporter Monica Soto Ouchi.