The Commerce Department reported late last week that retail sales fell by 0.9 percent last month, the biggest drop since August 2005. Despite June being a heavy discount month, many retailers suffered disappointing sales at their stores, although Wal-Mart surprisingly escaped the bout of summer doldrums.
A new consumer spending survey released by the America’s Research Group (ARG) indicated that many shoppers were both reducing their spending and postponing big-ticket purchases.
According to the survey, about 40 percent of 1,000 shoppers polled in early July said they reduced spending in June due to higher gas prices, while about 22 percent said they delayed a purchase of $599 or more.
“The impact of gas prices on the American consumer’s psyche is not going away,” Britt Beemer, chairman of ARG, says in the report. “The data reveal that retailers will experience difficult times and reluctant consumers for the important back-to-school and fall shopping periods.”
Wal-Mart posted a better-than-expected 2.4 percent same-store sales increase, citing strong year-over-year sales of flat-panel televisions, MP3 players, video game hardware, and laptops and desktop computers to offset ongoing weakness in its apparel and home categories.
The retailer said its computer sales were fueled by the recent introduction of select Dell computers at all Wal-Mart stores and Sam’s Club locations in the United States.
For July, Wal-Mart said it expects same-store sales to be up 1 to 2 percent, but cautioned that its mostly paycheck-to-paycheck shoppers continue to be challenged by higher prices at the pump. The company also said it sees the same pressures on customers in many of its international markets.
Less successful were J.C.Penney and Macy’s, which both took a hit in June. Penney’s same-store sales fell 1.5 percent, while Macy’s, which operates both its namesakes and Bloomingdale’s chains, posted a 2.7 percent drop in its June comparable sales, worse than its initial forecast for sales to be flat to down 2 percent.
Retail categories across the board suffered sales declines. Among the biggest losers, furniture and home furnishing purchases tumbled 3 percent, building materials sales slumped 2.3 percent, clothing sales fell 1.4 percent, department store sales dropped 1 percent, and consumer electronics purchases experienced a 1.4 percent decline.
But there were a few positive spots. Sporting good sales rose a moderate 0.4 percent. General merchandise sellers increased their sales by 0.3 percent, while sales at health and beauty supply stores rose 1.2 percent last month.