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Same-Store Sales Rose In May But Caution Looms

 June 02, 2011 01:42 PM

Retailers posted mixed sales result for May, as higher prices for gas and food crimped discretionary spending and inclement weather may have dented or delayed consumers' warm-weather apparel buying. While the rising tide of this retail recovery had been lifting all boats through the end of the first quarter, several chains are consistently outperforming rivals with better merchandise and customer service, and last month's performance really separated the winners from the losers.

Preliminary net sales for the 27 retailers we track (note that Walgreen's figures are estimated as they don't report until tomorrow) increased 7.2% from a year ago to $32.6 billion in May, while same-store sales rose 5.5% on top of a 2.8% gain last year – this was the 21st straight monthly gain after 12 consecutive months of declines. For the four-month fiscal year-to-date period, preliminary sales have increased 6.9% and comparable store sales are up 5.2%, on top of a 4.3% rise in the prior-year period.

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Luxury chains were the big winners in May, with Saks (20.2% comp gain), Neiman Marcus (+12.0%) and Nordstrom (+7.4%) all beating analyst estimates. High-end retailers continue to fare well because their customers are more immune from inflationary pressures than shoppers at discount stores and mid-priced department stores.

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Warehouse clubs Costco (+13% / +7% ex gas & f/x) and BJ's Wholesale (7.4% / +3.0% ex gas) continue to be among the strongest gainers month after month as shoppers are cutting down on their shopping trips, spending more per trip and looking for the convenience and value these clubs offer. Both are using discounted gasoline to lure shoppers into buying memberships and benefiting as they take market share away from competitors in categories other than consumables.

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