Most retailers posted better-than-expected sales in September as shoppers took advantage of back-to-school clearance items and discounted fall apparel.
Total net sales for the 24 retailers we track increased 7.1% from a year ago to $35.672 billion in September, while same-store sales rose 5.7% on top of a 2.7% gain last year – this was the 25th straight monthly gain after 12 consecutive months of declines. 17 chains reported comp gains for the month, compared to 18 last September.
For the calendar year-to-date period, total sales increased 7.2% to $287.1 billion and comparable store sales rose 5.4% on top of a 3.7% gain in the first 9 months of 2010.
Most chains have been able to push through cost increases and September results benefited as Hurricane Irene pushed some sales into September from August. However, traffic continues to slow as shoppers make fewer trips to the stores and consumers have come to expect deep discounts around Christmas time which could crimp 4th-quarter margins.
Costco (+12%, +8% ex gas & f/x) led all gainers as warehouse clubs continue to be top destinations for convenience-hungry shoppers and have been able to steal market share from other discounters and dollar stores. Costco also announced it is raising membership fees as it looks to offset cost increases and limit margin erosion.
High-end chains once again posted solid gains last month as their customers are much more immune from inflationary pressures and can readily absorb significant price increases. Nordstrom (+10.7%) and Saks (+9.3%) continue to outperform rivals, but recent stock market weakness and plunging confidence, even among high-earners, could derail the momentum heading into the Holiday season.
(click on company name below for detailed monthly performance data)
| September Retail Store Sales Scorecard | Same-Store Sales Chg |
| Company/Segment | Sales (1,000's) | YoY Chg | Sep-11 | Sep-10 | YTD-11 | YTD-10 |
| Bon-Ton | $ 286,900 | -4.1% | -3.6% | 5.9% | -1.8% | 2.2% |
| The Buckle | $ 98,400 | 13.0% | 10.3% | 3.0% | 8.4% | -1.3% |
| Cato | $ 70,700 | -1.7% | -3.0% | 2.0% | 0.2% | 4.1% |
| Costco | $ 8,610,000 | 14.6% | 12.0% | 5.0% | 11.5% | 7.6% |
| excluding gas & f/x |
|
| 8.0% | 4.0% | 6.9% | 3.8% |
| Destination Maternity | $ 44,200 | 6.8% | 0.2% | -2.2% | -2.5% | -4.7% |
| Dillards | $ 542,499 | 1.9% | 3.0% | 3.0% | 4.2% | 0.8% |
| Duckwall-ALCO | $ 41,700 | 4.0% | 3.0% | -2.3% | 4.2% | -4.0% |
| Fred's | $ 170,500 | 0.6% | 1.1% | 0.0% | 0.8% | 1.8% |
| Gap | $ 1,350,000 | 0.7% | -4.0% | -2.0% | -2.5% | 2.3% |
| Gap North Am |
|
| -4.0% | 0.0% | -3.3% | 0.3% |
| Banana Republic NA |
|
| -1.0% | 1.0% | -0.8% | 4.7% |
| Old Navy NA |
|
| -1.0% | -3.0% | -1.0% | 3.0% |
| International |
|
| -13.0% | 4.0% | -4.9% | 2.7% |
| JC Penney | $ 1,426,000 | -3.6% | -0.6% | 5.1% | 1.4% | 1.4% |
| Kohl's | $ 1,631,000 | 5.8% | 4.1% | 3.0% | 1.8% | 6.0% |
| Limited Brands | $ 818,600 | 11.3% | 11.0% | 12.0% | 13.0% | 8.9% |
| Bath & Body Works |
|
| 12.0% | 11.0% | 8.1% | 3.6% |
| Victoria's Secret |
|
| 13.0% | 13.0% | 17.6% | 13.4% |
| VS Direct |
|
| 7.0% | 1.0% | 3.6% | 8.0% |
| La Senza |
|
| 2.0% | 3.0% | -0.5% | 1.4% |
| Macy's | $ 2,298,000 | 5.4% | 4.9% | 4.8% | 5.5% | 5.0% |
| Nordstrom | $ 943,000 | 16.4% | 10.7% | 7.5% | 7.2% | 9.8% |
| Full-Line & Direct |
|
| 11.1% | 9.5% | 8.1% | 11.4% |
| Rack Stores |
|
| 8.7% | -0.9% | 3.7% | 0.2% |
| Rite Aid | $ 1,923,000 | 1.2% | 1.3% | -0.9% | 1.3% | -1.5% |
| Front End |
|
| 0.5% | -0.3% | 1.3% | -1.3% |
| Pharmacy |
|
| 2.1% | -1.2% | 1.3% | -1.6% |
| Ross Stores | $ 726,000 | 9.0% | 5.0% | 2.0% | 4.4% | 6.3% |
| Saks | $ 275,000 | 7.3% | 9.3% | 6.5% | 11.1% | 5.4% |
| Stage Stores | $ 118,000 | -0.1% | -0.7% | 1.8% | 0.8% | -1.1% |
| Stein Mart | $ 98,900 | -2.5% | -1.7% | 0.4% | -0.6% | -1.3% |
| Target | $ 5,923,000 | 6.5% | 5.3% | 1.3% | 3.4% | 2.1% |
| TJX | $ 2,220,000 | 5.7% | 4.0% | 1.0% | 2.8% | 5.3% |
| Walgreens | $ 5,950,000 | 5.3% | 3.1% | 0.4% | 4.2% | 0.7% |
| Front End |
|
| 3.4% | 0.7% | 4.2% | 0.5% |
| Pharmacy |
|
| 3.0% | 0.3% | 4.2% | 0.9% |
| Wet Seal | $ 53,600 | 4.7% | -0.3% | -0.7% | 5.6% | -0.9% |
| Wet Seal | $ 45,200 | 4.6% | 7.3% | 1.5% | 6.4% | -1.1% |
| Arden B | $ 8,400 | 5.9% | -8.7% | -1.8% | 0.3% | -0.3% |
| Zumiez | $ 52,900 | 18.3% | 10.1% | 17.0% | 9.4% | 9.9% |
|
| Total Stores | $ 35,671,899 | 7.2% | 5.7% | 2.7% | 5.4% | 3.7% |
Specialty retailers were mixed, as those that had strong merchandise offerings and continue to resonate with shoppers shined in the back-to-school and early fall seasons, including Limited Brands (+11%), The Buckle (+10.3%), and Zumiez (+10.1%). However, some chains missed the mark with less than compelling offerings, including Gap (-4%), Cato (-3.0%) and Wet Seal (-0.3%).
Even those chains that enjoyed stellar gains, such as Limited Brands, relied heavily on promotions – the company said merchandise margins were down compared to last year on cost pressures and promotions.
"Bargains drove the month," said Ken Perkins, president of Retail Metrics, a research firm. "There were lot of deals to be had, and we expect to see that follow through the rest of the year."
Performance at department stores, which have enjoyed a resurgence in market share of late after nearly a decade of contraction, was also mixed for the month. Gainers were led by Dillard's (+3%), Kohl's (+4.1%) and Macy's (+4.9%), who can thank surging online sales, which rose 43.3% during September and are up 39.3% year-to-date, for much of its success. Stein Mart (-1.7%) and JC Penney (-0.6%), however struggled during September and both look relatively weak heading into the all-important Holiday season.
Noting that "business remains on track, despite the persistently negative macroeconomic news," CEO of Macy's Terry J. Lundgren said "We are feeling quite confident that we will continue to gain market share as we head toward the holiday selling season."
Target (+5.3%) led discounters as the company enjoyed its strongest month since April, driven by a surge of shoppers who flocked to its exclusive limited-time only Missoni by Target line.
Target CEO Gregg Steinhafel said "We experienced strong sales results throughout the month and across a broad array of merchandise categories, demonstrating Target's ability to deliver on both sides of our ‘Expect More. Pay Less' brand promise and generate strong financial performance even in this soft economic environment."
While on the surface spending trends appear strong relative to the flurry of negative economic news lately, inflation-adjusted personal incomes fell for the first time in nearly 2 years in August and the savings rate fell to the lowest level since late 2009.
Plunging consumer confidence, highlighted by the Bloomberg Consumer Comfort Index which just capped its worst quarter in more than two years, has yet to have a signficant impact on retail sales. However, as we have seen in the past there is a lag effect and analysts have backed off predictions that the back half of the year would see a strong pickup in consumer spending.
The National Retail Federation was the latest firm to issue a Holiday retail forecast, which calls for a rather tepid 2.8% gain over 2010. This would represent considerably slower growth than last year's gain of 5.2% but still slightly above the 10-year average of 2.6%.