The US retail sector is now at its lowest level since the summer of 2009.
Profit Confidential reported:
The retail sector reports that sales for June, for stores open at least one year, gained an anemic 0.1%, the slowest rise since August 2009.
This was the third month in a row of significant weakness in the retail sector!
When compared to the 6.7% rise in sales in the same period last year for the retail sector, this 0.1% rise in retail sales from last month reveals how weak consumer spending in this supposed economic recovery is. Remember, dear reader: 70% of gross domestic product (GDP) is composed of consumer spending.
The retail sector uses this measure—stores open at least one year—because stores that are shutting down and new store openings tend to skew the data, so taking stores that are open for at least a year provides a more accurate reading of the retail sector and consumer spending patterns.
At least 15 of the 20 big U.S. retailers within the retail sector missed their sales estimates for the month of June, highlighting the weakness in consumer spending.
Some of the retail sector companies reporting weak results include Target Corporation (NYSE/TGT), Walgreen Co. (NYSE/WAG), and Costco Wholesale Corporation (NASDAQ/COST).
Clothing discount stores and low-end retailers within the retail sector, such as Ross Stores, Inc. (NASDAQ/ROST), experienced stronger growth in their sales numbers, as consumer spending hampered by low real discretionary income meant that people sought more bargains. (Source: New York Times, July 5, 2012.)