The consumer kept a tighter grip on money in April, leading to the worst results in memory among the retail stores surveyed by the International Council of Shopping Centers. Separately, the U.S. Commerce Department on May 11 reported a 0.2% drop in retail sales, which, exempting gasoline sales, was a drop of 0.4%.
The Commerce Department's numbers are a broader measure of retail acitivy than those from ICSC, which on May 10 reported overall chain store sales declined 2.4% from the same month last year. Among the individual categories in the Commerce Department's report, sales in April at general merchandise stores fell 1.2%, 2.0% at clothing stores, 2.1% at department stores, and 2.3% at building materials stores, the largest drop in that category since February 2003.
Wal-Mart, the nation's largest retailer, reported a 3.5% decline in same store sales in April, its worst monthly sales figures since "stagflation" during the Carter Administration. The company cited this year's early Easter and bad weather as primary contributors to the poor performance.
"April sales were impacted adversely by weather and calendar shifts, which goes a long way to explain the degree of weakness," said Michael Niemira, ICSC's chief economist and director of research. "However, the more important story is the trend over the last two months or even the last three months. Over the last three months, for example, year-over-year comp-store sales growth averaged 2.0% per month, which was exactly half of the pace the industry experienced during the same period in 2006. A good deal of this underlying slowdown can be traced to the weakness in the housing demand and its ripple effect on retail spending," Niemira added.
The ICSA reported that department store sales fell 4.5% and discounters were off 4.6%. Luxury store sales, however, were up 4.3% for the month. The other sectors that posted positive increases were drug stores (7.0%) and wholesale clubs (4.6%).
ICSC Chain Store Sales Trends is a monthly report on the U.S. retail industry's sales performance based on an ICSC preliminary compilation of publicly-available sales for 53 chain stores.