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Saturday, August 15, 2009

Retailers See Slowing Sales in Back-to-School Season

Stock analysts at Citigroup are predicting a decline in back-to-school sales for the first time since they began tracking the figures in 1995. They estimate August and September sales at stores open for at least a year — known as same-store sales — will fall 3 to 4 percent, compared with an increase of nearly 1 percent in the same period last year.

The National Retail Federation, an industry group, expects the average family with school-age children to spend nearly 8 percent less this year than last. And ShopperTrak, a research company, predicted customer traffic would be down 10 percent from a year ago.

“This is going to be the worst back-to-school season in many, many years,” said Craig F. Johnson, president of Customer Growth Partners, a retailing consultant firm.

Many analysts consider the season to begin in mid-July; sales numbers for that month are out already, and they were poor. Same-stores sales fell 5 percent compared with last year, according to the International Council of Shopping Centers, an industry group. Figures out this week from the government showed that overall retail sales in July were down 8.3 percent from the same month last year.

Back-to-school sales in July were hurt because many states moved their sales tax holidays out of July and into August. This month, retail sales should get a lift from those tax holidays. Still, the council expects August same-store sales to decline 3.5 to 4 percent compared with last year.

A report this week by IBISWorld, a research company, found that back-to-school spending would fall in nearly every category compared with last year: clothing, down 5.4 percent; footwear, down 4.4 percent; and electronics, down 1.8 percent. Sales of traditional school supplies like notebooks and pencils are expected to be about the same as last year.

Retailers typically do some of their biggest business during the back-to-school shopping period, also considered to be an early predictor of the holiday shopping season. If the forecasts turn out to be right, this could be another tough holiday period.

Source :- New York TImes

It ain't good news for retailer in this situation. It is the worst back to school sales.

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