July GAF Sales Gain Gives Retailers Hope For Strong 3Q.

The weather was hotter, and so were the summer clearance sales, as consumers picked up their spending on general merchandise and clothing in July. The National Retail Federation (NRF), responding to figures released by the Census Bureau, noted that although overall retail sales were flat from June, stepped up activity in the GAF category (general merchandise, apparel, furniture, home furnishings, electronics and appliance stores) should give retailers reason to look forward to the back-to-school shopping and Fall season.

Total retail sales in July remained unchanged from June. There was particular weakness in automobile sales and a big drop at gasoline stations due to falling prices. In contrast, according to NRF, sales in the GAF category posted a healthy 0.8 percent increase from June.

“The good news in July is that GAF sales were stronger, indicating a turnaround in the lackluster sales trends of the previous months. GAF sales in July posted the strongest month-to-month increase we’ve seen since April,” said NRF Chief Economist Rosalind Wells. “This was partly stimulated by the first wave of consumers receiving tax refund checks in late July. In addition, some of the strength in apparel sales was undoubtedly due to summer clearance, which is a positive sign that retailers were able to move excess inventory and make way for Fall merchandise.”

Both general merchandise and apparel store sales rose 0.9 percent from June. In addition, furniture, home furnishing, electronics and appliance stores posted a 0.5 percent increase in sales.

“Looking ahead, we expect the tax refund checks received over the next two months, as well as new Fall merchandise and back-to-school shopping, to help accelerate the progress we’ve seen in July,” added Wells. “It seems as though consumers are still spending, albeit at a less exuberant pace, and that the strong showing in July by the GAF sales category indicates that this may be the beginning of a stronger sales pattern.”

For more information at http://www.nrf.com .