Retailers Report Disappointing Sales in July
New York City The outlook for the back-to-school shopping season turned even more cautious Thursday, as retailers generally posted lower-than expected same-store sales for July.
The sales results, along with guarded outlooks for August, left little hope for any lasting boost from rebate checks as consumers headed into the second half of the year.
Discounters continued to lead the way. Wal-Mart reported a 3% gain in same-store sales for July, missing the 3.4% gain expected by analysts polled by Thomson Financial. The results excluded gasoline sales. Including gasoline results, same-store sales would have been up 3.7%.
“With the end of the stimulus checks, we know consumers are spending more cautiously, and we continue to see a pronounced paycheck cycle at the end of the month,” said Eduardo Castro-Wright, head of Wal-Mart’s U.S. operations.
Wal-Mart said that same-store sales increased in grocery, entertainment, and health and wellness, but that its home and apparel business posted small declines. Wal-Mart noted that it saw sales momentum building in back-to-school offerings across the store and expects the momentum to carry through the August period.
Costco reported a 10% increase in same-store sales, beating the 7.8% estimate from analysts. Excluding gas prices, same-store sales would have been up 6%. BJ’s Wholesale Club Inc. saw its same-store sales jump 16.7%, with gasoline sales contributing 9.7% of the increase.
TJX Cos. Inc. posted a 3% rise in July same-store sales. The results were slightly below Wall Street estimates, but the retailer raised its profit forecast for the second quarter. Ross Stores Inc. posted a higher-than-expected 4% rise. Family Dollar’s same-store sales rose 4.6%.
Target Corp. said that same-store sales slipped 1.2%, worse than the 0.3% decline that Wall Street expected. Target has a higher percentage of nonessentials like clothing and home furnishings compared to Wal-Mart.
Apparel specialty stores remained in a slump.
Chico’s FAS Inc. said Thursday same-store sales plunged 18.5% in July, as the chain widely missed Wall Street expectations.
Limited Brands reported a 5% decline in same-store sales, though results were better than the 7.4% drop Wall Street expected.
Gap suffered an 11% same-store sales drop in July, a larger decline than the 7% decline analysts had expected.
Pacific Sunwear of California posted a 4% drop in same-store sales, worse than the 0.4% estimate from Wall Street.
At American Eagle Outfitters, same-store sales dropped 7%.
Hot Topic posted a 2.1% decline in July same-store sales, hurt by weaker sales of men’s and women’s apparel.
Best Buy to open at Mall of America
MINNEAPOLIS Best Buy will open its doors on Aug. 7 at the nation’s largest mall, the Mall of America, in Bloomington, Minn.
.“Mall of America is one of the world’s premiere shopping and tourist destinations. Becoming part of the Mall of America community means that we are able to give people from around the globe the opportunity to interact with our great employees and experience Best Buy,” said Brian Dunn, president and coo of Best Buy. “We are excited to bring the latest in technology and services to this popular venue. Our new 45,000 square-foot store gives us a prominent presence within the mall, which is only a short distance from our U.S.-based headquarters. We also look forward to hosting a number of special events at the Mall that will provide our customers with amazing and inspiring entertainment experiences.”
Best Buy completes mobile store rollout
MINNEAPOLIS Best Buy announced that it has completed the nationwide rollout of Best Buy Mobile. According to the company, the conversion of 965 U.S. stores to Best Buy Mobile was finished three months ahead of schedule.
“Customers let us know quickly that they dreaded shopping for a mobile phone anywhere in the United States, whether with us or anyone else. Wireless customers are asking for more choice and more attention to their individual needs, and our new concept provides that,” said Shawn Score, president of Best Buy Mobile. “Where the new experience has been available, our customer satisfaction scores are through the roof – a direct result of the dedication and cooperation of thousands of employees in our stores and our corporate office to develop this unique and exciting set of customer choices and experiences.”
Best Buy Mobile was created as a joint venture with leading U.K. mobile retailer CarPhone Warehouse (CPW); the chain-wide conversion began in October 2006 and was completed this week, including more than 250,000 hours of intensive employee training, based largely on CPW’s industry-leading training programs in the United Kingdom.
In May 2008, Best Buy and CPW agreed to form a new venture to expand the CPW and Best Buy brands throughout Europe, with Best Buy acquiring a 50 percent stake in CPW’s European retail operations.