Retail sales rose in June, helped by sales at automobile, building and garden supply, and health and personal care stores, according to data released today by the U.S. Department of Commerce. Apparel specialty stores turned in their highest monthly growth in seven months, and their third straight monthly increase, helped by more seasonable weather and a slowly improving job market.
Total retail sales rose by a seasonally adjusted 5.2% in June, almost even with May’s 5.4% increase. Once again, automobile dealers reaped most of the benefit, since after excluding cars from the mix, retail sales increased by only 4.3%.
Total retail inventory rose by 3.6% in May, the most recent month for which inventory data are available, its smallest monthly increase in almost three years, sending the inventory to sales ratio edging down for the month.
Department, chain and discount store sales dropped by 1.4% to $14.2 billion on a 12-month smoothed basis, slightly better than May’s almost 2 percent drop. Big store inventory plunged by 6.4% in May, evidence that the investment in inventory management technology being made a many large retailers is indeed paying off. However, the unexpectedly slow sales caused the inventory-to-sales ratio in the channel to rise slightly in that month.
Apparel specialty store sales growth edged into positive territory for the third straight month with a 2.8% increase, to $21.3 billion, beating last month’s gain. This sector, which includes brands like Anthropologie, Banana Republic and Men’s Wearhouse, continued to fare better than department and discount stores, a trend that is expected to persist as consumers gravitate toward their easy-to-navigate stores and e-commerce sites.
One possible dark cloud hovering over all of this is the fact that to generate sales growth, many mall-based retailers had to resort to aggressive price promotions. Specialty store inventories dipped by 1.8% in May, and the sales to inventory ratio edged down slightly as well.
Sales at the combined department, chain, discount and apparel specialty retail sectors, a traditionally reliable barometer of total apparel sales, rose by a little more than 1 percent in May on a 12-month smoothed basis. March inventories for the combined sectors fell by 3.6%, less than April’s almost 4 percent drop.
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