Hot Summer kills retail?
June retail sales were poor across the board. Discounters continued to outperform and Americans, frightened about their job prospects, turned negative about consumption. August looks no better.
With the heat wave scorching much of the country, people are venturing out less. Moreover, the cost of running air conditioners is expensive, so people are eating out less and shopping close to family needs.
Back to school sales should begin to build shortly but retailers queried are worried. Some indicate that the all-important holiday shopping period could be impinged on. Although we have not heard if department stores are holding back on or canceling orders for Christmas, inventories remain an issue. Also, Walmart’s discounting has caused margin pressures on other discounters. Its Impact stores are also beginning to attract department store shoppers, and that could portend negatively to Target and lower-end department stores, including JC Penney.