Escalating job worries and rainy weather dampened shoppers’ appetite for buying summer staples like shorts and dresses, resulting in sharp sales declines for many merchants.
As retailers reported their monthly figures Thursday, the weakness appeared to cut across all sectors, particularly apparel sellers. Among the biggest disappointments so far were Limited Brands, the teen merchant Wet Seal Inc. and the Children’s Place Retail Stores Inc.
Even the Costco Wholesale Corporation, the low-priced operator, struggled with sales decline compared with a year ago when business was helped by stimulus rebate checks.
Wal-mart Stores, the world’s largest retailer, no longer releases monthly sales.
“Consumers are under severe pressure on the job front, so discretionary spending is just not happening,” said Ken Perkins, president of retail consulting firm Retail Metrics. “This is not setting up well for the back-to-school season.”
Costco said Thursday that its sales in June at stores open at least a year — also called same-store sales — dropped 6 percent but that it managed to meet Wall Street’s expectations. Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer’s health.
The company said in a recorded message that some of its strongest categories included food and fresh food products, like deli items, frozen food and candy. It experienced weakness in nonfood, discretionary categories.
But many mall-based apparel merchants fared worse.
Limited Brands struggled with a 12 percent drop in same-store sales last month; analysts surveyed by Thomson Reuters had expected a 7.9 percent decline.
Wet Seal posted an 11.1 percent drop in June, worse than the 9.1 percent decline that Thomson Reuters had expected.
The Children’s Place reported a 12 percent decline in sales in June; analysts had expected an 8.7 percent decline.
Rainy weather had been a factor in depressing sales of seasonal goods last month, but clearly shoppers are increasingly being discouraged by financial worries. The latest jobs report from the government, which showed shrinking wages and higher-than-expected job losses, is increasing concerns about consumers’ ability to spend in the critical months ahead.
