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Retail sales still strong
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August 5, 1999: 12:25 p.m. ET
Warm July weather, confidence in economy keep shopping spree going
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NEW YORK (CNNfn) - Retailers reported sales were up solidly in July, as the hot weather drove shoppers to take refuge in stores and feed on their still-buoyant confidence in the U.S. economy.
"July was surprisingly strong -- consumers are on a buying spree," said Kurt Barnard of Barnard's Retail Trend Report, a monthly newsletter. "Remember the old saying 'Shop till they drop'? Now it has become 'Shop till they shop some more.' "
The Bank of Tokyo-Mitsubishi/Schroders index of 83 retail chains reflected a 6.9 percent average increase in same-store sales -- sales in stores open a year or more. That's an improvement on the 6.6 percent average for the first half of the calendar year.
Leading the way was Wal-Mart (WMT), the nation's largest discount chain. The Bentonville, Ark.-based retailer posted a 9.6 percent increase in same-store sales, as the company racked up hefty gains from its move into the grocery business.
July, like January, is a clearance month when retailers empty their shelves. But experts said big sales numbers in May and June led to a decline in clearance sales because there simply weren't as many items left to sell off.
"The July results reflected continued favorable consumer spending given high levels of consumer confidence based on continued low unemployment, solid economic growth and relatively low interest rates," said Lehman analyst Jeffrey Feiner in a report Thursday.
A sweltering summer also meant hot sales in certain segments, Barnard said. "People rushed into stores to get the most lightweight clothes they could find and to buy air conditioners and fans like crazy."
Same-store sales in July `99 vs. A year ago
Sears (S), the nation's second-largest retailer -- whose stock, like Wal-Mart, is one of 30 issues in the Dow Jones industrial average - said sales edged up 0.9 percent.
No. 3 retailer K Mart (KM) reported sales rose 3.8 percent on strong demand for household goods and electronics. Federated Department Stores (FD), the parent of Macy's, said sales rose 4.7 percent.
J.C. Penney (JCP), in what Barnard called a success at "coming to grips with all its problems," said its sales rose 4.1 percent, stronger than he expected due to a better presentation of goods.
Among the other strong performers were two companies with lackluster reports a year ago, which made an improvement easier. Kids' clothes retailer Gymboree (GYMB) said sales boomed 13 percent and sales at women's apparel chain Talbots (TLB) rocketed 14 percent.
One notable retailer on the downside was upscale department store Neiman Marcus (NMG), which posted a 1.3-percent drop in sales. Barnard said The Gap's (GPS) 2 percent gain was less than hoped.
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Wal - Mart
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