Competitive Watch: U.S Chain Store Sales Boosted in October

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Competitive Watch: U.S Chain Store Sales Boosted in October

NEW YORK -- 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 figures released by 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 news release.

The discount, drug and wholesale store sectors in October continued to look strong as a whole. Discount stores posted an overall increase of 2.5 percent (excluding Walmart, 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 ended Oct. 31, to total $4.5 billion; however comparable store sales fell slightly (0.1 percent). Overall, the company has seen 1.4-percent growth during the third quarter 2009, but a year-to-date loss of 0.3 percent.

Drug store sales increased 3.4 percent, following the 3.7-percent uptick experienced in the previous month. The drug channel has shown continued growth since March 2009, although those amounts fluctuated greatly from month to month.

Walgreens showed a significant increase of 9.4 percent in October, with sales totaling $5.6 billion. 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 $53.2 billion, 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. Year-to-date, its 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 ended 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 that 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.

-- Nielsen Business Media