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U.S chain store sales up 2.1 percent in October

Luxury market shows first positive reading since May 2008

U.S. chain store sales in October increased 2.1 percent on a same-store basis compared with the same period last year, representing the strongest reading since July 2008, when sales increased 3.3 percent, according to the International Council of Shopping Centers (ICSC).

"Further evidence of retail recovery continues to unfold as October comparable-store sales have outperformed the year-to-date reading in every category," Michael P. Niemira, ICSC chief economist and director of research, said in a media release. "The improvement in the stock market has had a significant impact on the affluent shopper's willingness to spend as the luxury market has shown its first positive reading since May 2008."

Department store sales fell by 1.1 percent in October to follow a 2.3 percent decline from the previous month. Average monthly sales for the category total a negative 7.8 percent.

In the four-week October period, comparable revenues in the Specialty Retail Stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, decreased 6.2 percent. The merchandise categories in the Specialty Retail Stores segment that performed the strongest included women's fine apparel and shoes and men's clothing.

Things continued to look bright in the discount, drug and wholesale store sectors in October. Discount stores posted an overall increase of 2.5 percent (excluding Wal-Mart, which reports its data on a quarterly basis). This marks the category’s second consecutive month of gain and follows a 0.5 percent increase in September.

Target reported 2.8 percent growth in net retail sales for the four weeks ending Oct. 31 to total $4,541 million; however comparable store sales fell slightly (0.1 percent). Overall, the company has seen 1.4 percent growth during the third quarter of 2009, but represents a year-to-date loss of 0.3 percent.

Drug store sales increased at 3.4 percent, similar to the 3.7 percent uptick experience the previous month. The category has shown growth since March 2009, although those amounts fluctuated greatly from month to month.

Walgreen’s showed significant increase (9.4 percent) in October, with sales totaling $5,650,600,000, Sales and front-end sales at comparable stores also grew, 4.9 percent and 4.7 percent respectively. The company is up 7.6 percent, or $53,278,662,000, year-to-date from totals in 2008.

Rite Aid, on the other hand, posted a 0.5 percent decrease, due to front-end sales dropping 2.7 percent. Overall pharmacy sales increased 0.5 percent, while comparable pharmacy sales increased 1.8 percent year-over-year. Year-to-date, Rite Aid sales decreased by 0.3 percent overall, attributed to a 1.1 percent increase in same-store pharmacy sales and a 3.1 percent dip in front-end sales.

Wholesale clubs posted the greatest gains at 4.3 percent. This marks the sector’s third consecutive month of gain and a significant increase over previous months (0.8 percent in September and 1 percent in August). The year-to-date monthly average is still down 2.7 percent overall, however 1.9 percent gains are shown when fuel sales were excluded.

Costco same store sales grew to $12.58 billion during its nine-week reporting period ending Oct. 31, reporting gains of 5 percent. Net sales grew 7 percent year-over-year, or $5.68 billion, during the four weeks ending Oct 31. Comparable domestic sales for the four-weeks grew 2 percent domestically and 17 percent internationally, while comparable sales totaled 3 percent and 7 percent respectfully. (Positive impact from foreign exchange and negative impact from gasoline deflation was excluded.)

Sales at BJ’s Wholesale Club grew 3.5 percent to total $764.7 billion. Comparable sales (1.1 percent) also grew despite negative impact from fuel sales of 4.8 percent. Merchandise sales at comparable stores rose 3.7 percent. These totals are still much lower than growth seen in October 2008. Year-over-year comparable sales for the same period were up 10.2 percent and fuel sales contributed 3.6 percent to that gain.

Looking ahead, the ICSC expects U.S. chain same-store sales for November will increase 5 percent to 8 percent compared with November 2008. In addition, ICSC Research projects U.S. holiday sales for the November-December 2009 period will increase by approximately 1 percent based on either GAFO store sales or the ICSC's tally of major chain store sales. Shopping center sales are expected to increase by 1.8 percent this holiday season.