Retailers Report Higher Same-store Sales, But Comparison Is to the 'Crater' of 2008

A sales gain is almost always a good thing. But, surprising as it was, today's report of same-store sales gains for last month compared to September of 2008 is no reason to believe that U.S. "consumers are back to their free-wheeling ways," says Wharton marketing professor Stephen J. Hoch, who also directs Wharton's Jay H. Baker Retailing Initiative. "Last year, retail cratered in September," Hoch reminds us. "Everyone was scared to death. But as time goes by, people adjust. This [sales report] is decent news."

Same-store sales data are released by retailers monthly and compare sales at individual stores to the same month in the previous year. Not all of the retailers reported gains. Kohl's, Costco and Limited Brands reported gains of 5.5%, 3% and 1%, respectively; while Target and J.C. Penney saw sales declines of 1.4% and 1.7%, respectively. In a roundup of the sales reports, The Wall Street Journal notes that the gains exceeded the estimates of analysts, many of whom had raised their expectations in the days preceding the data's release. It also suggests that the figures could signal an overall sales gain for the full year. The New York Times, meanwhile, points out that while the numbers were the best that they have been all year, "sales in major retailing categories are merely at 2005 levels."

The bottom line on the retail sector, according to Hoch, "is that it's a little bit better than it could have been, but overall it's kind of flat. The discount sector is doing pretty [well], general merchandise is okay and high-end is still bad."

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