Retailers' back-to-school sales may get passing grade after all
The International Council of Shopping Centers reported Wednesday sales at chain stores were basically flat for the week ending Sept. 5, down only 0.1 percent from a year earlier. Compared with the week before, sales were up 0.6 percent.
Michael Niemira, the ICSC's chief economist, said cooler weather and a later start to the school year in parts of the country helped drive up sales. Many retailers had mentioned the late arrival of Labor Day this year had dragged down sales last month.
But we're not out of the woods yet. As most retailers have noted, unemployment is still high and consumer confidence still low. Niemira held to his forecast that September sales will be down two percent below last year's.
Right up until Labor Day, retailers had been bracing for a weak back to school season, reading reports of cash-strapped parents putting notebooks (the kind with spirals, not microchips) on layaway. Stores had cut back on inventory, trying to avoid a replay of last fall, when the credit crunch hit home in September and torpedoed fall sales.
This year, back to school inventory was down by double-digit percentages, if retailers reports are to be believed, and the annual tug of war between parents looking for sales and retailers seeking profit looked to be weighed in favor of the stores.
It looks like, faced with the start of classes Tuesday in most of the country, parents blinked and went shopping.
Speaking at annual Goldman Sachs (GS) Global Retailing Conference Wednesday morning, both Ron Sargent, CEO of Staples Inc. (SPLS) and Mike Ullman, his counterpart at J.C. Penney Co. (JCP), said back to school sales met expectations.
"Back to school is always a competitive time of year ... this year was competitive (but) not more competitive than past years," said Sargent. "I don't think this is worse than prior years."