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Us Retail Sales Fail To Raise Confidence

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The pace of retail sales declines in the US slowed in August, as the back-to-school shopping season neared its close, but results still fell short of anything that can be described as a consumer recovery.

Across the retail sector same store sales continued their decline of the last 12 months, with discount chains faring the best.

At Target, the low-price department store chain, total sales in August were $4.9 billion (£2.9 billion), representing a 2.9 per cent fall in same store sales over August 2008. This is an improvement on July’s decline of 6.5 per cent and in line with the company’s own expectations.

Gregg Steinhafel, the chairman, president and chief executive officer, said that store traffic was essentially flat compared with August 2008, marking a meaningful improvement from the first half of the year.

At JC Penney, another favourite department store among middle America for back to school shopping, same store sales fell by 7.9 per cent in August – an improvement on July’s 12.3 per cent decline. Total net sales came in at $1.4 billion. Women’s clothing was the top performing merchandise division, with a strong performance from both boys and girls lines, too.

TJX, which offers lower-price clothing and home fashion goods at its TJ Maxx, Marshalls, HomeGoods and AJ Wright chains in the US, reported total sales of $1.6 billion and a 5 per cent increase in same store sales on last year.

Costco, the warehouse club, reported a smaller-than-expected 2 per cent fall in August same-store sales, less than the 5.7 per cent expected by analysts polled by Thomson Reuters. Same-store sales in the US fell by 4 per cent, but there was a 3 per cent rise in the company’s international division. Costco’s smaller rival BJ’s reported a 2.2 per cent rise in same store sales.

Gap, which also owns the Banana Republic and Old Navy chains, reported total net sales of $1.12 billion for August. This represents a 3 per cent decline in same store sales on the same period last year and compares with an 8 per cent decrease in August 2008.

Old Navy, positioned downmaket of Gap, put in a strong performance with a 4 per cent increase and significantly stronger margins, the company said.

Upscale retailers fared worse. Abercrombie & Fitch, the teen clothing retailer, reported a 29 per cent fall in same store sales, compared to August 2008, with net sales of $313.9 million. However, online sales increased by one per cent to $19.1 million. Saks reported total sales of $160.8 million and a 19.6 per cent drop in same store sales – worse than the 16.3 per cent decline seen in July.

The negative growth recovery gathers pace.

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