Change! Growth in Retail Sales Slows From Last Year's Numbers

At the New York Times, "Retail Sales Fell Short in June":

Some of the nation’s biggest retail chains reported on Thursday that sales growth slowed in June, as shoppers held back amid wavering consumer confidence and unemployment.

A survey by Thomson Reuters of 18 retailers showed that sales at stores open more than a year were up 2.5 percent in June, well below the 7.7 percent increase recorded in June 2011. The same-store sales results surpassed Wall Street analysts’ forecasts of a 2.4 percent rise.

Retailers have seen lower spending over all by domestic customers, a drop in consumer confidence as millions of people remain out of work and fewer tourists are willing to spend amid a global economic slowdown.

Nancy Liu, a retail strategist for Kurt Salmon, a consulting firm, said that one of the reasons for the lower June results this year was that the sales numbers were being compared with a strong performance in June 2011.

“Retailers were coming out of the gate” a year ago, she said. “They would have had to outperform to beat those numbers.”

Global economic issues were weighing on consumers. Ms. Liu said the euro zone crisis, the potential slowdown of growth in Asia and unemployment rates that had not recovered as quickly as people expected had prompted retailers to promote and discount heavily to get customers to buy.

In addition, because of a mild winter, retailers may have benefited from some of the summer spending earlier in the year, and inventories are being discounted and cleared to allow for back-to-school buying.

Retailers have been keen to attract cautious consumers in a recovery weighed down by constraints in employment, housing and credit as well as, until recently, high gasoline prices.

“The second quarter is proving to be a real downer for retailers and consumers alike,” said Chris G. Christopher Jr., a United States economist for IHS Global Insight. “Job prospects are looking dimmer, equity markets are more volatile, the European debt crisis has reared its ugly head and consumer confidence is back into recession territory.”