Consumers didn’t just hit the beach in July, they hit the mall, too: Monthly retail sales came in stronger than many observers had forecast, with the Gap, Target, Macy’s and Limited Brands all turning in solid numbers.
The International Council of Shopping Centers says its index rose 4.6% for the month, marking the strongest gain since March. “The pace of sales in July improved appreciably over last month,” says Michael P. Niemira, the trade group’s chief economist, in a release. “July is typically dominated by summer clearance so this stronger than expected performance is particularly encouraging, especially after the softer three-month run we have just been through in the industry and the overall economy.”
The Gap turned in one of the biggest surprises, with sales gaining an impressive 10%, including a 13% gain at the Gap, a 6% gain at Banana Republic and a 12% jump at its Old Navy division.
At Target, where same-store results rose 3.1%, the company credited the numbers to “our innovative merchandising, remodel program and 5% REDcard Rewards, driving healthy increases in traffic and sales in a consumer environment that remains quite challenging.” At Macy’s, same-store sales gained 4.1%. Limited Brands, parent of Victoria's Secret, says sales climbed 12%. Costco saw an 8% gain. And at Kohl’s, which has been struggling in recent months, sales managed a 1.7% gain.
Luxury chains, which have been strongest in recent months, were relatively weak, scoring a 1.3% rise in the ICSC index. “The promotional shift will bring those sales into August for the luxury segment,” it notes, and between that August gain in luxury and back-to-school spending, it is forecasting a heady 4 to 5% gain for August.