The biggest retail losers in June 2010 were concentrated mostly in the teen and young adult apparel segment, as some store chains increased promotional activity during the month. Some consumers might want to take advantage of these promotions to fill out their wardrobe and help the economy.
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The U.S Department of Commerce reported that June 2010 retail and food service sales totaled $360.2 billion, down 0.5% from the previous month, but still 4.8% above the same period in 2009.
Looking at only retail sales, the picture was slightly worse, with a sequential decline of 0.6% in June 2010 over last month, but 5.0% above the June 2009 level. Retail sales also fell by 1.1% in May 2010, marking the second straight month of declining retail sales. Investors shouldn't overreact to the latest government report, as a large drop in automobile sales during the month skewed the number down.
A Closer Look
A closer examination of the numbers indicates that automobile sales fell 2.3% in June 2010. If you exclude this category, retail sales fell by 0.1% on a sequential basis. (Learn more about last month's retail numbers in June Retail Sales: Worthless Data Or Valuable Tool?)
Some sub-sectors of retail did well during June 2010. Department stores saw a 1.1% increase in sales over May, and clothing stores saw sales up by 0.6%. Electronics and appliance stores registered a 1.3% increase.
The apparel retailers stood out in June with some of the weakest same store sales reports. Many analysts cited excessive promotional activity as stores started to clear out inventory in preparation for the back to school season.
Wet Seal (Nasdaq:WTSLA) - down 3.6%.
The Buckle Inc. (NYSE:BKE) - down 7.3%.
Hot Topic Inc (Nasdaq:HOTT) - down 2.1%
American Eagle (NYSE:AEO) - down 1.0%.
One non-apparel loser during June 2010 was Rite Aid (NYSE:RAD). The company reported that same store sales in the four-week period ending June 26, 2010, fell by 2.5% from the same period last year. This was slightly worse than May 2010, when same store sales fell by 1.7%. Rite Aid, which operates more than 4,700 drug stores across the United States, is seeing weakness in both the front end of the store and with sales in the pharmacy department.
Many observers felt that retailers increased promotions in June to help with sales. While there might be some merit in this, it can be difficult to track the trend of promotional activity at a particular store chain compared to its historical record, or to that of its peers. However, a look at the websites for the four apparel retailers above does show some great deals for consumers that might want to help out both the economy and their appearance.
The Buckle Inc. is offering thousands of clearance items at up to 75% off for both men and women. These specials include jeans, swimwear, wallets and just about any type of item that a consumer could possibly put on their body. The chain is also giving away $10,000 worth of gift cards to 385 lucky shoppers with the winner getting a $1,000 card.
Wet Seal has many items on sale for what it calls its summer clearance, and is also offering a further 30% off for online buyers. The chain has a huge inventory of dresses, jeans and sandals for only $10.00. (Find out how you can use Twitter to save, by finding coupons and deals in Cheap Tweets: Followorthy Deals On Twitter.)
American Eagle is offering a further 30% off of its clearance items, either on line or in the store. The items on clearance include jeans, footwear, accessories and even Hawaiian style shorts if you're into that sort of thing.
Hot Topic Inc. also has a large clearance section on its web site, and is offering deals on hundreds of items including t-shirts, accessories, shoes and even body jewelry.
The Bottom Line
June retail sales were weak, and fed suspicions by investors that economic growth is slowing down. Savvy consumers can take advantage of increased promotional activity to find bargains, and boost economic growth as well.
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