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Off Price Retailers Lead the Pack

Posting positive results for May, off-price retailers Ross, Inc. and TJX Cos. continue to lead the pack in strong retail sales. Pleasanton, CA-based Ross Inc. reported May same-store sales at an increase of 8%, topping estimates for a growth of 5.3%. Total sales were $746 million, an increase of 13% from the year prior. Off-price retailer TJX Cos., Inc., of TJ Maxx and Marshall’s stores, reported that May comps were up 8% and total sales increased 10% from last year to $1.9 billion.

In a recent press report, Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc., stated, “We were particularly pleased to see all of our businesses across the U.S., Canada and Europe continue to post such consistent, strong performance. Once again, customer traffic was up significantly at every division which we believe speaks to the power of our values, brands and fashions.”

The consistently steady sales of off-price retailers speak to increases in customer traffic at discount retail stores, where sales are driven by current fashions and low prices. This reflects a stagnant, low consumer confidence in the face of global economic uncertainty. A report released from the Conference Board on Tuesday showed that the US consumer confidence index fell to 64.9 in May from a 68.7 in April, dropping to the lowest it has been in four months.

While off price retailers show strong sales without a web presence, e-commerce is proving itself an invaluable necessity for mid and high level stores. American Apparel Inc. reported comparable store sales increased 19% for May, including a 19% increase in comparable store sales for its storefronts and an 18% increase in online sales.

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York, PA-based Bon-Ton Store Inc. recorded double digit sales growth in E-Commerce for May and considers it to be a key driver of business. Comparable store sales increased 1.5% while total sales increased 1.2% to $183.1 million.

Among department store chains, Cincinnati, OH-based Macy’s (M) set the tone on Wednesday by reporting that same-store sales increase of 4.2% for May. Online sales, which are included in the same-store sales calculation, at and combined, increased 42.3% in May and 35.7% year-to-date compared to 2011.

Leading fashion retailer Nordstrom Inc. reported comparable sales growth of 5.3% with total sales climbing 9.3%. The company told Wall Street analysts on its last year-end earnings call that over the next five years nearly 30% of the company’s planned $3.30 billion in capital expenditures will be spent on further developing its Internet infrastructure, including about $140 million in 2012. Nordstrom’s recently acquired HauteLook Inc., an online private sale leader, which will help the company continue to build its thriving multi-channel retail format.

A recent report by The Census Bureau of the Department of Commerce showed that the estimate of US retail e-commerce sales for the first quarter of 2012 was $53.2 billion, an increase of 3.1% from the same quarter last year. The first quarter e-commerce estimate increased 15.4%, while total retail sales increased 6.5% in the same period. E-commerce sales accounted for 4.9% of total sales in the first quarter of 2012.