Same-store sales best expectations

By Don Hogsett -- Home Textiles Today, 6/7/2004 12:00:00 AM

NEW YORK —

Apparently undeterred by higher prices at the pump, shoppers still flocked to the malls during May, pushing up same-store sales for key U.S. retailers at a higher than expected pace.

After taking a breather the month before, shoppers headed back to the stores, lured by seasonal goods and stronger fashion offerings in apparel, notably in women's and juniors.

Among the biggest winners, as consumers relentlessly sought out bargains, were the nation's warehouse clubs, with Costco comps shooting up 16 percent, followed by BJ's with a 12.1 percent gain and Sam's Club at 11.8 percent.

Other heavy hitters during the month were Stein Mart, bounding back with a same-store gain of 11.1 percent; Saks, at 9.4 percent, helped by a huge 19.4 percent same-store increase at its tony Saks Fifth Avenue unit; and JCPenney, up 9.1 percent.

Penney said the gain reflected "strength in both fashion and basic merchandise throughout the month, particularly during Mother's Day events. Catalog/Internet sales were even with last year, with Internet continuing to experience strong growth, increasing over 35 percent for the month."

Additionally, Penney said it's pleased with the early response to its Chris Madden line of home decor and furnishings launched in early May. "This merchandise is currently available in most department stores and on the Internet, and will be in catalog print media beginning in late June."

Same-store sales jumped 9.4 percent at Saks, driven by a mammoth 19 percent increase at the upscale SFA division.

Department store sales rose at a more moderate pace of 3.1 percent, with sales strongest in accessories, soft home, cosmetics, furniture and men's furnishings.

But the cars weren't stopping in front of every door in the mall, and some retailers recorded declines, often blaming a shift in the calendar that pushed Memorial Day sales into June.

Sears recorded a worse-than-expected drop of 3.7 percent, and chairman and CEO Alan Lacy blamed the lack of Memorial Day sales as well as "a slackening in consumer demand across most categories."

Despite a major upgrade of home fashions at Sears, with improved merchandise assortments and fixturing in 300 stores, sales in home categories declined during the month, and weakness persisted in spring apparel offerings. The retailer said its off-the-mall formats reported flat sales for the month.

May turned out to be a mixed bag for other department store retailers, with Federated reporting a gain of 2.9 percent, but Dillard's reporting a 5 percent drop, May a 3.8 percent decline, and Gottschalks a 7.6 percent drop.

Among the big mass merchants, Target Stores was up 5.8 percent, while Wal-Mart reported a 5.9 percent increase. Kohl's reported a 5.0 percent increase, and ShopKo gained 3.2 percent.

Retailers across the board had been fretting that higher gasoline prices might eat into disposable income, blunting retail sales. But at least so far it hasn't had that much of an impact.

"It may cost more to drive to the stores, but consumers are still shopping," said Tracy Mullin, president and CEO of the National Retail Federation. "Consumers have told us they would scale back some spending as gas prices increase, but the shift does not appear to be dramatic."

RINGING IT UP

WRINGING IT OUT

May sales for major retailers
Total chain sales, including all merchandise departments, for period ending 05/29/04a
Sales in $millions