Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 9, 1993 TAG: 9307090085
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: CHICAGO LENGTH: Medium
Sears Merchandise Group led retailers by posting a 12 percent gain in same-store sales from June 1992, a sign that elimination of less-profitable stores is helping the retail chain in the long run, analysts said.
"The [stores] you have left are the ones showing the largest growth," said David Kelly of Economic Advisors Inc. in Boston.
Sears' Brand Central electronics stores have helped boost the chain's sales, in part by lowering prices to attract more sales, said Karen Sack, retail analyst for Standard and Poor's in New York.
"It looks as if they're getting their act together," said Mike Niemira of Mitsubishi Bank in New York.
But while most analysts refer to the overall chain stores sales figures as positive, they caution that this is a relative measure.
"They're not numbers that would be indications of a strong consumer," said Evelina Tainer of Simply Economics in Chicago.
Also, the June sales figures were boosted, in most cases, by a late Memorial Day holiday, analysts said.
One chain showing weak sales was The Gap, which posted only a 2 percent gain in June. Sack attributed part of its slow growth to the fact that the chain has not cut prices, as other stores have.
Large chains - Wal-Mart saw a 7 percent sales increase in June - are doing well, which is somewhat surprising given other economic indicators, Tainer said.
Sales "are better than the employment report would suggest," she said. Nonfarm payrolls rose an anemic 13,000 last month.
Tainer saw overall chain store sales up about 5 percent in June, a gain not much more than the inflation rate.
Niemira said his index of same-store sales climbed about 5.7 percent in June, noting sales have risen consistently in the past 3 months.
Consumer electronics probably will continue strong for the rest of the year, led by personal computers, he said.
Kelly, whose index shows same-store sales up 6.1 percent in June, sees "modest growth" continuing as the economy sputters.
"This economy seems incapable of firing on all four cylinders at the same time," he said.
There may be some growth in sales in the third quarter as students prepare to return to school, Sack said. But that could be followed by a comparatively weak fourth quarter, because sales may pale next to the euphoria apparent in fourth-quarter 1992 after Bill Clinton's election as president.
by CNB