WHAT IS 'Chain Store Sales'

Chain store sales are monthly revenue figures from large department-store and drugstore chains in the U.S. The data comes either via press release or directly from the companies on the first Thursday of each month.

Analysts tend to study these figures, as well as any associated statements from company executives, to gain insights into consumer spending and retailing trends. Monthly chain store sales for each retailer appear as a percentage change from the same month a year earlier. Some companies also break out chain store sales figures by division and provide additional details or statements.

Often, the chain store sales correspond with same-store figures that track the year-ago percentage change for all stores owned by the same retailer operating the past 12 months or more, in an effort to eliminate the volatile performance of stores in their first year of existence.

BREAKING DOWN 'Chain Store Sales'

Chain store sales, along with many other consumer spending indicators, help some investors project movements in the stock and bond markets. Specific data gleaned regarding the health of individual companies help some investors and analysts project future earnings, especially if a company’s profit margins are often stable.

Moreover, strong overall chain store sales from multiple large retailers points to healthy consumer spending and robust consumer confidence, which sometimes leads to more spending in the near future. Conversely, too much growth among multiple chain stores could signal inflation, which is a negative for the bond market.

Chain Store Sales in the Aggregate

Because consumer spending accounts for more than two-thirds of gross domestic product, several organizations track chain-store sales in the aggregate to try to get a feel for the direction of the overall sales of the industry.

For example, the U.S. Census Bureau aggregates chain store sales data in two monthly that track the overall performance of retailing: The Monthly Retail Trade Report and the Advance Monthly Retail Trade Report. The chain store sales appear as part of a line item called GAFO, which represents general merchandise, apparel, furniture and office supplies, stationery and gifts, all of which usually is sold in department stores. These figures represent the aggregate growth of major national department stores, including Walmart, JCPenney and others.

Notably, however, chain store sales do not include figures from online-only giants, most notably Amazon.com. The Census Bureau, part of the U.S. Department of Commerce, publishes a separate Quarterly E-Commerce Report with details online sales, both for online-only locations and brick-and-mortar retailers that also do business online.

Other third-parties also attempt to aggregate some of the chain store and same-store-sales data. For example, Thomson Reuters, the parent of media company Reuters, utilizes such data to compile a retail sales index, based on a weighted composite of chain stores.

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