Back-To-School Rush Helps US Retailers See August Sales Exceed Estimates

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(Photo: Gisela Royo)
(Photo: Gisela Royo)

BUSINESS

  • Same-store sales for chain stores rose by 6%
  • Back-to-school shopping for K-12 and college students expected to hit $84 billion
  • 70% of US economic activity gained from consumer spending

US retailers posted August sales that exceeded forecasts, according to data compiled by retail analysts at Retail Metrics Inc. and the International Council of Shopping Centers. Same-store sales for chain stores on a whole rose by 6%, driven by promotions for back-to-school shopping as well as cooler weather conditions.

Sales were also aided by state sales tax holidays.

The research collected tracked same-store sales for more than 20 retail chains, excluding drug stores and Wal-Mart. Same-store sales are sales in stores that have been open at least a year, and do not take into account sales made online.

Wet Seal and Zumiez were the only retailers that did not meet sales expectations.

Analyst Chris Donnelly told Bloomberg: “Despite a lot of challenging macroeconomic fundamentals, the American consumer finds these opportunities where they just pick themselves up and they go out and shop, and that’s what we saw this month.”

A strong third quarter is expected, boosted by August sales. Women’s wear and home goods are forecast to rise 8%.

Top Retailers

Gap, Macy’s, Nordstrom, Bon-Ton and Target all saw an increase in sales, with Nordstrom leading the way and benefiting from its Anniversary Sale to see a major increase of 21%. Estimates had been around 11%.

Gap saw sales rise 9%, with sales highest in its Old Navy chain, which reported a 12% increase. Estimates for Gap had been around 5.4%. Macy’s, which includes Bloomingdale’s, saw sales rise over 5%, beating estimates of 3.3%.

At the lower end of the increases, Target saw sales rise 4.2% and Bon-Ton had a 2.2% increase.

Back-To-School Retail

Back-to-school shopping for K-12 and college students is expected to total close to $84 billion this year, according to the National Retail Federation. The back-to-school shopping season runs August and September, and is the second-highest selling season.

The increase in back-to-school sales gives retailers confidence going into the holiday season, analysts say. However, rising gas prices, unemployment and weather conditions could have an impact on holiday shopping.

Some 70% of US economic activity is from consumer spending, reports Reuters.

Key Statistics - US Apparel Retail Industry (source: MarketLine)

  • In 2011, the apparel retail industry in the US had revenue totaling over $329 billion. Between 2007- 2011, this represents a compound annual growth rate (CAGR) of close to 2.7%.
  • In 2011, the US apparel retail industry's most lucrative segment was women’s wear, which had revenue of over $170 billion, or nearly 52% of the total industry value.
  • For the five-year period 2011–2016, the industry’s performance is predicted to accelerate to a CAGR of 3.1%. By the end of 2016, the industry is forecast to be valued at $384 billion.

By Melina Druga for
Melina Druga is an American writer and editor. She is the author of Enterprising Women: Practical Advice for First Time Entrepreneurs.

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