Same-Store Sales Growth in the Week Ending April 25
April Macro Indicators Bring Hope for Department Stores (Part 4 of 5)
Same-store sales rise in the third week
The latest Johnson Redbook retail sales index, released on April 28, indicates 1.4% same-store sales growth on a year-over-year basis in the week ending April 25. This compares to a 0.8% gain in the previous week. Same-store sales in the third week of April grew by 0.2% on a month-over-month basis.
The Johnson Redbook retail sales index is prepared by Redbook Research. It tracks retailers across these six categories:
apparel specialty
department
discount
furniture
drug
miscellaneous
Gains were particularly seen in the lawn and garden, sporting goods, and spring apparel categories. The third week in April was the last to involve a calendar distortion due to an early Easter. According to Redbook, though retail sales improved in the third week due to comparatively better weather conditions, they still remained below expectations.
Retail Economist–Goldman Sachs index
The Retail Economist–Goldman Sachs Weekly Retail Chain Store Sales Index is compiled by Goldman Sachs and the Retail Economist. The latest release for the week ending April 25 indicated a 2.5% rise in US same-store sales compared to the corresponding week last year. Same-store sales increased by 3.3% in the previous week based on a year-over-year comparison. Same-store sales also increased by 0.8% on a week-over-week basis.
Despite adverse weather, the index reported strength in the office-supply segment, for the second consecutive week, as well as improvement at discounters and dollar stores.
Implications for department stores
Improvement in US same-store sales could be a positive indicator for department stores such as Macy’s (M), Nordstrom (JWN), Kohl’s (KSS), and Sears (SHLD). In recent years, US department store sales have been subdued because of the surge in online shopping and competition from off-price retailers.
The SPDR S&P Retail ETF (XRT) invests ~6.2% of its portfolio holdings in department stores.
Better same-store sales indicate higher consumer spending. Consumers tend to spend more on discretionary items when they have more confidence in the growth prospects of the economy. The next part of this series discusses consumer confidence indices.
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