July 5 - Retailers lost some steam in June as consumers, who spent early in the season, pulled back their spending on worries about the economy. Bobbi Rebell reports.
Easy come, easy go. U.S. shoppers- who showed such promise earlier in the spring season- took a break in June- because they were worried about the economy. UBS U.S. economist Kevin Cummins: SOUNDBITE: KEVIN CUMMINS, U.S. ECONOMIST, UBS (ENGLISH) SAYING: "You have the uncertainty surrounding Europe that is in the news everyday. You have the uncertainties surrounding the fiscal cliff at the end of the year and what's going to happen there in Washington and then you've seen some slowing in job growth in the past couple months." According to Thomson Reuters data- June same-store sales showed the smallest monthly gain in almost 3 years. REPORTER BRIDGE: BOBBI REBELL, REUTERS REPORTER (ENGLISH) SAYING: One telling example: Macy's, whose flagship New York City store is undergoing major renovations. Its results were below forecasts- and its CEO put out a statement blaming the macro-economic environment which he called stagnant at best. Others that saw evidence of penny pinching included Gap whose sales were flat from a year ago, and Target which showed a smaller gain than expected. The rich do continue to spend- Saks came in strong- topping expectations. But biggest winners were stores targeting frugal consumers- like TJX- parent of TJ Maxx. Even the weather played a role in stalling spending. Evan Gold of Planalytics: SOUNDBITE: EVAN GOLD, VICE PRESIDENT OF CLIENT SERVICES, PLANALYTICS (ENGLISH) SAYING: "We actually had the warmest March ever recorded, and that's in over 118 years, so all spring products, be it for home centers, for traditional soft lines retailers, for broad line retailers, all got off to this great start, and in some cases, yes, those sales were pulled forward a little bit." Looking ahead, many retailers put in their back to school orders months ago when the economic recovery looked more solid and could be sitting on a lot of inventory if consumers stay home. Bobbi Rebell, Reuters.