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Weather Cooperates, but Department Stores Drag Down June Apparel Sales

Total retail sales growth edged up slightly in June, thanks to seasonable weather, but apparel growth under-performed overall retail, according to data released today by the U.S. Department of Commerce.

Total retail sales rose by 4.2% on a 12-month smoothed basis, more than the monthly growth rates of the past three months, thanks to healthy sales at auto dealers. Excluding the automotive sector, total retail sales increased by only 2.9%.

Sales at general merchandise stores, which include dollar and variety stores, were virtually flat during the month.

Total retail inventory increased by 5.2% in May, the most recent month for which this measure is available, a bit more than in prior months.

Apparel specialty store sales increased, but the increase was offset by declines at department, chain and discount stores, indicating that specialty stores continued to steal department and discount store market share.

Department, chain and discount stores suffered their fifteenth straight month of declines, but big store inventory rose by only 1.8% in May, pushing down the inventory-to-sales ratio slightly. Aggressive couponing and price promotions continue to rule the day in these channels, particularly with JCP now back in the high-low pricing fray.

Specialty apparel store sales grew 5.4% in June, more than May’s 4.8% jump, helped by warm weather, which stimulated sales of summer merchandise. The specialty store inventory-to-sales ratio remained stable.

The combined department, chain, discount and apparel specialty retail sector, a traditionally reliable barometer of total apparel sales, rose negligibly on a 12-month smoothed basis. Combined May inventories increased by 1.2%, well below April’s 2.3% increase.