US retailers happy with modest gains
Gap leads pack with 10 per cent like-for-like growth
July 10 2003
US retailers saw modest sales growth in June in the main, but most will be happy with pushing forward in what remains a difficult market with consumers spending cautiously.
As always, Wal-Mart’s performance was seen as a bellwether for the sector. The world’s biggest retailer said same store sales grew by 2.7 per cent in June, towards the lower end of its forecasts of between 2 and 4 per cent, and a long way from the 7.9 per cent recorded in June 2002.
Same-store sales in the Wal-Mart chain grew by 2.4 per cent, with total sales up 9.5 per cent to $16.7bn. Same-store sales in the Sam’s Club warehouse business, where Wal-Mart is currently pushing for market share, rose 4.1 per cent, with total sales up 8 per cent to $3.38bn.
Wal-Mart’s international sales, which includes the Asda chain in the UK, leapt by 20 per cent to $4.56bn in June. Market share figures last week indicated that Asda is fast closing the gap on rival Sainsbury’s to challenge for the number two spot in the grocery sector behind Tesco.
Target, which competes with Wal-Mart in its core value market, saw same-store sales edge ahead by 0.8 per cent, while total sales increased by 7.9 per cent to $4.14 bn. The Target Stores and Marshall Field’s chains performed to expectation, but the Target-owned Mervyn’s chains saw a sharp same-store decline of 13 per cent.
Convenience store 7-Eleven said June U.S. same-store merchandise sales rose by 0.7 per cent, with total sales up 4.7 per cent to $943.6m. June sales were lower that expected due to cold and wet weather in several parts of the US, but the retailer saw and improvement over the Fourth of July holiday weekend, with a same-store sales increase for the first week of July of around 4 per cent.
Like Wal-Mart, fashion retailer Gap was also boosted by strong international sales in June. Same-store sales climbed 14 per cent in Gap International, with rises of 11 per cent at Old Navy, 8 per cent at Gap US and 7 per cent at Banana Republic.
An overall same store increase of 10 per cent once again put Gap well ahead of the pack, as the recovering business benefits from comparison with very weak sales a year ago. Total sales for the five weeks to July increased by 13 per cent to $1.5bn.
Other speciality retailers joined Gap in seeing stronger sales. Limited Brands said same-store sales rose 7 per cent at Victoria’s Secret and 3 per cent at Bath & Body Works.
Clothing retailer Gadzooks, which is exiting mens and childrens clothing to focus on its womenswear offer, said total sales for the five weeks ended July 5 fell 2.7 per cent to $28.9m.
Once again, the US department store sector found sales hardest to come by. Federated Department Stores, owner of Macy’s and Bloomingdale’s continued to be hit by the tougher market with same-store down 2 per cent and total sales down 2.2 per cent to $1.34bn.
JC Penney saw same store department store sales increase by just 0.1 per cent, with total sales down 1.6 per cent to $1.21bn. Sears Roebuck saw like-for-likes down by 1.8 per cent and total sales down 1.2 per cent to $2.66bn.
Barnes & Noble, the US’s largest bookseller, was boosted by the release of [i]Harry Potter and the Order of the Phoenix[/i], selling 896,000 copies of the latest book to feature the boy wizard on the day it went on sale. The company saw a 10.5 per cent rise in same store sales for June, with an admirable 4.9 per cent increase even when the Harry Potter effect is excluded.
