Discounters gain in August
New York City Discount retailers posted solid gains for August, helped by aggressive discounting as consumers continue to seek out bargains. Tax-free holidays in nearly 20 states also helped attract customers. Analysts also said the warmest August in more than a quarter of a century helped spur sales of late lingering summer clothing inventory.
“It’s a glimmer of hope that the numbers are coming in ahead of low expectations,” said Ken Perkins, president of research firm RetailMetrics, in an Associated Press report. “But it took retailers being heavily promotional to bring shoppers in.”
At Costco, same-store sales increased 7% in August, buoyed by higher gas prices and improved international revenue Its results topped the 4.2% rise analysts expected, according to by Thomson Reuters.
The wholesale club operator reported a 6% rise in revenue at U.S. stores in same-store sales and an 11% increase in its overseas locations.
Costco’s fiscal fourth-quarter revenue climbed 8% to $23.6 billion, while revenue for the fiscal year improved 9% to $76.3 billion. Analysts polled by Thomson Reuters expected fourth-quarter revenue of $24.23 billion and fiscal-year revenue of $77.98 billion.
At Target Corp., sales of back-to-school items and food helped boost same-store sales 1.8% in August, just short of analysts’ predictions for a 2% increase. Food, health care and beauty items were the strongest sellers. Electronics and home decorations were weaker.
For the year to date, Target said same-store sales rose 2.2%, while total sales rose nearly 5% to $35.31 billion. Strongest results were in the upper Midwest, the Carolinas and Texas, while parts of the Northeast and Southwest, as well as Michigan and Ohio were weaker.
BJ’s Wholesale Club reported a 2.4% increase in August. Same-store sales rose 2.4%. Analysts, on average, had expected same-store sales to rise 3.3%.
Sales for the four weeks ended Aug. 28 rose 4.9% to $794.6 million. Excluding gas sales, same-store sales at BJ’s clubs rose 1.9%, lagging estimates of 2.4%.
Family Dollar Stores said Thursday that comparable-store sales for the fiscal fourth quarter, ended Aug. 28, increased 6.1%, beating analysts estimates. Net sales for the quarter rose 8% to $1.96 billion. Sales during the quarter were strongest in the consumables category.
In other same-store sales results for August:
- TJX Cos.’ sales rose 2%, a bit short of the 2.4% increase analysts had expected. Total revenue for the four weeks ended Aug. 28 rose 6% to $1.7 billion, from $1.6 billion last year.
- Ross Stores reported a 5% rise in sales, better than the 2.9% gain forecast by Reuters analysts. Total sales for the period ended Aug. 28 were $608 million, up 9%.
- At Fred’s, same-store sales rose 3.6%, just ahead of analysts’ estimates.
Report: Small uptick in August sales
A report released Wednesday by MasterCard Advisors found that, in August, sales in most categories recorded a slight year-over-year uptick compared to the year-over-year performance of July.
According to the SpendingPulse report — based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for all other payment forms, including cash and check — some categories were boosted by back-to-school spending.
“Categories such as apparel and electronics appear to have been helped by the back-to-school season, which tends to peak in August, although some spending in apparel can be pushed back into September as parents delay purchasing fall and winter clothing until cooler weather conditions set in,” said Michael McNamara, VP research and analysis for SpendingPulse.
In addition, he said, the hot and dry conditions in August helped the overall restaurant sector while the continued volatile financial markets performance negatively impacted the luxury sector and, to a lesser extent, the jewelry sector. Tax-free weekends in Florida, Illinois and Massachusetts boosted results as well. “As a result, year-over-year comparisons in electronics, office supplies and apparel benefited,” he said.
Total U.S. apparel sales was back in positive territory in August, up 2.6% year-over-year, following July’s 1.1% decrease. This category, on a year-over-year basis, has been up five out of eight months this year. All sub-sectors except for women’s apparel and men’s apparel posted increases, with the children’s category up a solid 8.4% year-over-year, and family apparel up 4.1%. Footwear posted a modest increase of 0.9%. Following July’s sharp decline, men’s apparel was down only 1.9% in August, while women’s apparel, down 1.9% in July, slipped a little further in August, declining 2.7% year-over-year.
Consumer electronics and appliances showed increases on a year-over-year basis. While the consumer electronics category was up 2.3%, the appliances category recorded a 9.4% increase.
E-commerce sales growth slowed in August to 7.2%, which although well into positive territory, was the smallest year-over-year increase in 2010.
Costco takes stand on on supplier treatment of animals
ISSAQUAH, Wash. Costco has commented on video showing the mistreatment of some young animals saying: “The company had not been aware of the issue before we saw the video. We are extremely disappointed, not only with the performance of our supplier in this instance, but with our own performance as well. We hold ourselves to a high standard, and in this case, we plainly did not perform to that standard.”
Costco said it is in the process of developing a more definitive written policy to make clear its long-standing position that any type of cruel treatment of animals is unacceptable. All of Costco’s suppliers are aware that Costco insists upon ethical treatment of all animals involved in producing products for sale in its warehouses, without exception, the company said. Costco said it has an inspection program to ensure that its suppliers are in compliance with its standards, but in this case that inspection program did not uncover the problem. The company said it takes full responsibility for this error. It will increase its vigilance in the future to see that its policies are adhered to by all of Costco’s suppliers, the company reported.