Shoppers showed some signs of life in the first week of September, as both ICSC and Redbook reported improvements in Weekly Chain Store Sales results:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales decreased 0.1% in the first week of September vs. a year ago, while same-store increased 0.6% on a week-over week-basis. Commenting on the results, ICSC chief economist Michael P. Niemira said sales picked up last week "as the cooler-than-normal weather combined with the later start of the school year in some parts of the country helped to drive traffic." He added, "Although easier comparisons in September will help to improve the trend for the month, ICSC Research still expects sales will be down about 2%" from last year.
• Redbook Research reported that retail same-store sales for the week ending September 5th declined 2.4% compared to the year-ago period, while sales for the first week of September rose 0.2% from the same period last month. The firm said "Shoppers responded positively to various Labor Day sales and promotions. Discount stores reported strength in categories such as children's clothing, shoes and lower margin back-to-school supplies. Discount stores also registered strong food sales ahead of the long weekend." However, department stores, which have been the weakest performers throughout the recession, continue to struggle. Note that Wal-Mart stopped reporting weekly and monthly sales figures in May of this year, and the substantial impact they had on the index is evident in the graph below.

It will take several weeks to see if this represents real improvement or if it was more of a calendar effect, as most likely a good part of the demand was from Labor Day sales and late back-to-school shopping which was pushed into September from August of last year. While we don't expect much underlying improvement in consumer demand for September, retailers will benefit from a late Labor Day and be up against much easier same-store comps from last year. Even though the bar is set fairly low for holiday sales expectations, we should start to see positive year-over-year results in October and November, as those were the months last year spending really fell off a cliff.