Chain-Store May Sales Estimated Up 2.0% Year-Year

Dow Jones Newswires | June 5, 2003 | John McAuley

[Starwind]

Chain-Store May Sales Estimated Up 2.0% Year-Year

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By John McAuley

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. chain-store sales showed a modest 2.0% year-over-year increase in May, the first month after the Iraq war.

Interest in the data is higher than usual as these are the first figures untainted by the war effect. Concern over the prospect and then the conduct of the war had cast a pall over consumer spending in previous months.

Economists saw the chain store sales as a bit stronger than expected, but still reflecting a sluggish economic recovery.

"I estimate that sales rose by 2.0% from their year-ago level in May," said Mike Niemira, senior economist at the Bank of Tokyo-Mitsubishi in New York. Niemira's estimate is based on his sample of 76 retail chains. "Weather was a factor cited by many retailers I spoke to, but they cited it both for boosting and crimping sales and the effects varied across regions."

For instance, Niemira noted that while unusually cold and wet weather in the East hurt spring sales in the early part of the month, sales in the West were helped by good weather.

In addition, he noted that rainy weather in the East over the Memorial Day weekend boosted sales because many people went shopping in stores and malls rather than engage in traditional outdoor activities for this unofficial kickoff weekend of the summer.

The official retail sales report is due to be published by the Commerce Department on June 12 at 8:30 a.m. EDT (1230 GMT). Niemira estimates that total retail sales will edge up by 0.1% to 0.2%.

Another economist who follows chain store sales to get an insight into underlying consumer demand is John Lonski, chief economist at Moody's Investors Service in New York.

Lonski compiles a chain store sales index. So far, on a partial tally of 40 chains including all the largest ones, the Moody's index is also showing a 2.0% year-over-year increase.

Lonski estimates that on the basis of these chain store sales, non-auto retail sales are likely to be up 0.5% compared with a decline of 0.9% in April. "I think there could have been a seasonal adjustment problem in April because sales were unusually weak," he said. Depending on the performance of auto dealer sales, Lonski estimates that total retail sales for April will be unchanged.

He pointed out that a 0.5% increase in non-auto retail sales in May would bring the year-over-year increase to 4%. "This contrasts with five straight years prior to 2000 when the year-over-year increase for non-auto sales averaged 5.1%," Lonski noted. "That led to a lot of the expansion of retail outlets and store space that we're now dealing with."

-By John McAuley, Dow Jones Newswires, 201-938-4425; john.mcauley@dowjones.com

(END) Dow Jones Newswires

06-05-03 1139ET- - 11 39 AM EDT 06-05-03

[Starwind]

Most of the items sold in chain-stores are non-durable imported, so this doesn't help trade deficits or US Mfg.

[Starwind]

Fyi...

[ARCADIA]

...And, ignorance is bliss.

[sarcasm]

I understand that business is booming at Goodwill and other used clothing stores.