The Wall Street Journalreports
that back to school sales have been quiet slow, which has retailers worried about the upcoming holiday shopping season. Consumers are focusing on sales and are buying necessities only: impulse buys are a think of the past.
Despite sales tax holidays in several states designed to spur sales, back-to-school spending remains lackluster, according to industry experts. Retailers' recent efforts to shake customers from deep discounts and spur buying by tightly controlling inventories are fizzling.
Specialty clothing store sales fell in August, an indicator of the poor results expected Thursday when retailers report their back-to-school sales. Continued weak demand is raising new worries about the retail outlook for Christmas.
Now, retailers that traditionally rely on back-to-school sales as an barometer of demand for the remainder of the year face tough choices on stocking and hiring. Customers should find ever slimmer pickings and fewer clerks as stores hold off on early holiday orders and further trim costs.
On Thursday, big chain stores are expected to report August sales results showing a 3.6% decrease from a year ago in sales at stores open at least a year, according to research firm Retail Metrics Inc., which aggregates data from analysts. Thomson Reuters estimates sales fell 3.8%, using a slightly different methodology.
The decrease in this closely watched measure of retailers' health would be the 12th consecutive month of sales declines.
Store executives said they are going into the season with less inventory, decreasing the breadth and depth of their assortments. They hope to avoid the discounting bloodbath that marked last year's holiday. Many clothing stores, for example, now carry fewer styles, and fewer sizes and colors.
Some chains, like the Gap, are prepared to increase inventory quickly if sales are better than expected. But others are not, which will mean bare shelves at Christmas time. Most retailers seem to be determined not to have huge sales before Christmas this year and so have really cut back on inventory. But if shoppers decide to spend more than expected this year, retailers will lose sales if the hot inventory items aren't available for purchase.
