http://market-ticker.org/archives/1302-Same-Store-Sales-Stink-July.htmlSame Store Sales Stink (July)Let's cut the crap here and now: there is no evidence of a consumer rebound anywhere in the same-store sales numbers.
Discounters, which have largely been holding up amid the recession, reported largely lower results. Costco Wholesale Corp. reported a 2% drop in the U.S. excluding gasoline, and Target Corp. maintained its woes with a worse-than-expected 6.5% decline. Target Chairman and Chief Executive Gregg Steinhafel said the company was beginning to see "modestly improving risk trends" in its credit-card segment, which has struggled amid rising delinquencies and charge-offs.
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Among the worst-performing retailers was Abercrombie and Fitch Co., which posted another month of weak same-store sales with a 28% decline. That was about what analysts were expecting, according to Thomson Reuters. The company hasn't reported growth since April 2008 and is increasingly shedding its no-markdown mantra. Less-expensive rival Aeropostale Inc. maintained its recent gains with a 6% increase, though that missed views.
So now we've got the low-end stores, the bastion of "trade down", getting hit as well.
Remember that July is when back-to-school shopping usually begins to hit, and therefore month-over-month increases in same-store sales are normally significant. Losses in July .vs. June are particularly nasty, as this is a key month for retailers.
If this persists into August the "green shoot" meme for consumer spending will be utterly destroyed.I just don't see the evidence for a "resilient consumer."
The media is trying to conjure up all sorts of excuses, such as "cash for clunkers" siphoning off retail dollars and "bad weather" (the usual claim when store sales suck) but the simple fact of the matter is that the consumer is getting hammered on multiple fronts - job loss, hour and wage cutbacks for those who have jobs, and tightening credit conditions.Go ahead and try to explain this away if you want, or listen to the "green shoot" folks if you insist, but the facts are what they are -
the consumer is weak and not improving at all, despite the dumping of huge amounts of stimulus money into the economy by the government.
No secret info here, folks. Temporary govt. spending programs and stimulus coupled with restocking business inventories is not a recipe for long-term recovery and growth. If the consumer is dead and his/her means for making money are diminished then there will be no recovery. Anyone in the White House would be facing this disaster, it's how they would deal with it that counts.
