NEW YORK – A blistering heat wave and a patriotic holiday drove U.S. consumers into air-conditioned malls and shopping outlets, helping lift chain store sales in the last retail week of June, two reports showed on Tuesday.
Sales at U.S. chain stores rose 0.7 percent in the week ended July 6 after a 0.9 percent decline in the previous week, the Bank of Tokyo-Mitsubishi and UBS Warburg said in a joint weekly report.
Separately, Instinet Research said sales during the five retail weeks of June -- which includes the July 4 holiday -- rose a solid 1.8 percent as consumers snapped up everything from air conditioners to summer clothing, according to its Redbook report.
"The Independence Day holiday and sales promotions as well as demand for seasonal goods drove the pick up in customer traffic and sales for the week," BTM said.
Consumer spending accounts for about two-thirds of U.S. economic activity, so analysts tend to scour any news emerging from the retail sector for signs of the nation's broader economic well-being.
CONSUMERS HIT THE BRAKES
The rise bodes well for overall sales performance during June for a sector struggling with lackluster consumer confidence and weak pricing power, but sales growth has clearly wound down from the rapid clip witnessed earlier this year, analysts said.
"It looks like the pace of sales growth has slipped a bit from the early year surge," said Frank Badillo, senior retail economist at Retail Forward, an industry research group in Columbus Ohio. "Spending appears to leveling out at a more modest pace."
Most retailers will report their full monthly results for June of June on Thursday.
The U.S. Commerce Department is expected to release its monthly report on retail sales at 8:30 a.m. (1230 GMT) on Friday. On average, Wall Street economists polled by Reuters forecast a 0.7 percent rise in sales for June after a 0.9 percent drop in May.
Sales patterns across the United States still indicate that less may be more for American shoppers -- department stores continued to lag their discount counterparts as consumers hunted for value.
"It looks like most of the moderation is concentrated at the department stores which has been the pattern of the past few months," Badillo said.
Pharmacies and small stores appear to be performing better than the garden variety chain store. Earlier on Tuesday, CVS Corp. (CVS) said front-end sales -- which exclude pharmacy items -- at stores open more than one year rose 3.6 percent from a year earlier in June.
Meanwhile 7-Eleven Inc. (SE), the leading convenience store chain, said sales at stores open at least a year rose 2.4 percent in June.
The BTM/UBSW Weekly Chain Store Sales Snapshot is compiled from seven major discount, department and chain stores across the country that report their weekly results. They include J.C. Penney Co. Inc., Sears , Target Corp.(TGT), Kmart Corp. (KM), Wal-Mart Stores Inc. (WMT) , Federated Department Stores Inc.(FD) and May Department Stores Co.(MAY)
The Redbook Retail Sales Average, released weekly by Instinet Research, is a sales-weighted average of annual growth in same-store sales at discount, department and chain stores.
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