August Sales Solid Despite Hurricane Irene Damage
August sales were solid, and they were boosted by strong Back-to-School sales, said Michael McNamara, vice president of research and analysis for MasterCard Advisors’ “SpendingPulse.”
Last month’s sales results particularly demonstrated that the American consumer is resilient. They spent despite anxiety over political instability and the debt debate in Washington, D.C.; manic volatility on Wall Street; and the extreme weather and flooding caused by Hurricane Irene. “Even taken together, these factors have not been able to derail the U.S. consumer,” McNamara said in a statement. Hurricane Irene was blamed for slowing down August sales, perhaps by 0.5 percent to 1 percent, according to Michael Niemira, chief economist for the International Council of Shopping Centers. An index of U.S. same-store sales charted by the ICSC increased 4.6 percent for August compared with the same month in the previous year.
Terry J. Lungren, Macy’s chairman, also noted that Irene slowed his company sales. More than 100 Macy’s closed to escape the hurricane’s wrath. Lungren noted that sales would have been 1.5 percentage points higher if stores had not closed and consumer traffic had not declined because of the storm. He forecast that the department store giant would not completely lose the business. “We expect the hurricane’s effect on sales will be substantially offset as we move through September and the third quarter,” he noted. Business was solid for mass merchandisers such as Target Corp. Its same-store sales increased 4.1 percent. Off-pricer Ross Stores reported a 4 percent same-storesales increase—slightly ahead of the 3 percent forecast. Kohl’s chief Kevin Mansell blamed his company’s 1.9 percent decrease in same-store sales on lower consumer traffic. Kohl’s will sharpen its pricing focus to boost traffic, Mansell said. Gap Inc. sales stumbled in August. Its same-store sales declined 6 percent. Gap Chairman Glenn Murphy blamed poor sales on the San Francisco retailer’s lackluster women’s merchandise. “We’re determined to make the necessary adjustments to women’s product and marketing to improve our overall performance and drive top-line growth going forward,” he said in a statement.
Luxury store Neiman Marcus and mall-basedpop-culture retailer Hot Topic Inc. both stopped reporting their monthly sales in August. Both retailers will continue to report their sales performance but on a quarterly basis. —Andrew Asch
