Magazine article American Banker

August Retailer Sales Up 6%, Trailing June, July Increases

Magazine article American Banker

August Retailer Sales Up 6%, Trailing June, July Increases

Article excerpt

NEW YORK -

U.S. retailers' sales at stores open at least a year rose about 6% in August as shoppers scooped up fall fashions and back-to-school items such as knapsacks and notebooks, Bank of Tokyo-Mitsubishi reported Wednesday.

The estimate for same-store sales indicates a cooling trend, down from July's 6.9% increase and June's 7.4% gain. But this August's sales gains were far ahead of August 1998, when they rose 4.4%.

Wal-Mart Stores Inc. and other discount chains that aggressively marketed back-to-school programs led the sales increases.

"It's pretty incredible how much retailers ramped up back-to-school promotions," said analyst Alan Mak of Argus Research Corp. "Back-to-school is a pretty sizable portion of a retailer's bottom line, so they really have to attack it."

The outlook may not be as cheerful as the August numbers suggest. Rising gasoline prices and other signs of inflation may curb spending, especially at stores that cater to lower-income consumers, said Michael Niemira, a Bank of Tokyo-Mitsubishi analyst.

"Early in the year it seemed that the whole industry was partaking in a great time," he said. "That started to change a little bit a few months ago. Now some retailers will do well, but at the expense of others."

Same-store sales are a key indicator of a retailer's business because they exclude sales from new and closed stores. The Bank of Tokyo-Mitsubishi index includes about 80 chains. Many retailers will report their sales results today.

Wal-Mart's sales are expected to rise as much as 9%. …

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