Retail sales continue steep decline
A shopper carries an Abercrombie & Fitch bag down Fifth Avenue in New York City.
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Kai Ryssdal: Ready for another dose of bad news on the economy? Sorry we don't have something more upbeat, but today retailers came in with generally dismal monthly sales numbers. These are the figures that store chains report themselves, comparing June 2009 to the same month last year.
So, we saw Abercrombie & Fitch down 32 percent, Gap down 10 percent, Target down 6 percent -- all worse than expected. Also, Macy's down 9 percent, Penney's down 8 percent, Costco down 6 percent and Saks down 4.5 percent. A few broke the mold: Aeropostale, TJX and Ross were up.
Why are most of the major retailers still doing so badly? We asked Marketplace's Mitchell Hartman to find out.
MITCHELL HARTMAN: After living through more than a year of recession, you'd think retailers would have figured this out by now. Consumers are freaked-out. They're spending less, saving more, and many won't buy anything unless it's a steal.
In fact, we've been reporting for months that retailers are adapting: closing stores, cutting way back on inventory so they won't be stuck with piles of unsold merchandise.
Analyst Sara Johnson at IHS Global Insight says, the chains have been making changes. But it's not enough.
SARA JOHNSON: Retailers are indeed cutting inventories. But until demand picks up, they will need to continue price discounting. Consumers won't spend unless they feel like they're getting a good price.
Johnson says getting people to spend more is gonna take awhile.
JOHNSON: We're still seeing very steep job cuts. And the impact of the stimulus programs is beginning, but it's not encouraging spending.
Casey Chroust is with the Retail Industry Leaders Association.
CASEY CHROUST: Last year we had government stimulus checks that had just been released.
Those checks boosted shopping, which makes this year's numbers look even worse by comparison. Nature's not helping either, says Chroust.
CHROUST: We also had great weather last year, and we haven't had this this year, which has been two additional challenges our retailers have had to face.
Cue the electronic violins . . .
MILLI VANILLI LYRIC: Blame it on the rain, it was falling, falling. Blame it on the stars, it shines at night.
Economic commentary by Milli Vanilli.
I'm Mitchell Hartman for Marketplace.