For the nation's big retailers, July wasn't exactly filled with fireworks and celebrations. For Delaware businesses, the month seemed a bit more festive -- depending on what was being sold, and where it was being bought.
At the state's beach resorts, it's been a generally lackluster season, retailers said, partly because of the occasional uncooperative meteorological gods, partly due to an early summer spike in gasoline prices. Elsewhere in the state, July's fortunes were brighter, retailers report.
"Our local Wal-Mart trade area, we're doing pretty good," said Bob Davis, market manager for the retailer's northern Delaware locations. "Delaware's a strong market for us."
On the national level, Wal-Mart Stores Inc. posted a slim gain in July, but warned that its increased discounting are hurting profit margins. For many other big chains, the back-to-school shopping season had a disappointing start as consumers rattled by a weakening housing market and other financial pressures stayed away from stores and malls.
The weakest performers nationally were mall-based apparel chains, particularly teen merchants such as Pacific Sunwear of California Inc. and Wet Seal Inc. Among the few standouts were J.C. Penney Co. and Costco Wholesale Corp., both of which beat July's expectations.
The nation's economists blame sluggish sales on such macro-level influences as a slumping housing market, a widening credit crunch and increasingly jittery consumers. Locally, the dynamics are less clear cut, varying by sector and region.
Beach merchants say they're seeing plenty of browsing, but maybe not as much buying. "It's in a slump from previous years, that seems to be a general consensus among businesses down here," said David Morton, sales associate for the Loungin' Lizard, a Rehoboth Beach hammock store.
Still, that sense of sogginess isn't being felt too sharply at some businesses. "We've hit what we're expecting to. For us, we're happy," said Holly Rubenstein, owner of Saltwater Mama, a new store for moms and moms-to-be in Rehoboth. "Other business owners have told me people have just not been buying as much as other seasons."
That was surely the story for Tim Ross and other garden center owners during this year's chilly spring. Since then, determined gardeners have mounted quite a comeback, said Ross, who owns Always The Garden in Bellevue.
"We ran a 20 percent increase" in July, he said. "April was pretty much a total washout, it was just so cold and so wet ... I think because it started late that it continued longer."
Success over the summer depends on things starting early over at Chardon Ltd. Fine Jewelry and Gifts in Georgetown. Typically, months like July are relatively slow, but owner Charlie Koskey isn't complaining this year. "It's a little bit better than our previous years," he said.
August usually marks the coming of even happier times, he said. "Normally, by the second week of August, people start shopping for the holidays," he said.
Such spirited shopping was also evident at Magnolia Furniture, which posted higher sales than last July. "I think people have a little more confidence, so they can buy a little more," said owner Frances Zornes.
That confidence isn't being seen everywhere in the nation. "Overall, July sales were negatively impacted by soft mall traffic," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "The consumer is holding up, but certainly feeling the pinch of the housing market and higher gasoline price."
The weak sales reports do not bode well for retailers' second-quarter profits, which are slated to be announced starting next week. According to Perkins, second-quarter earnings growth should be up a modest 2.5 percent, ratcheted down from 7.0 percent in early May amid increased discounting and sluggish sales. On Thursday, Talbots Inc. was among several stores that cut earnings forecasts.
source: delawareonline.com