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Economy in Brief

Chain Store Sales Down With Higher Gas Prices
by Tom Moeller August 30, 2005

Chain store sales fell again according to the International Council of Shopping Centers (ICSC)-UBS survey. Last week's 0.3% decline marked the fourth consecutive weekly skid and dropped the August sales average 0.1% below July which rose 0.8% from June.

During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.

Recent weakness in chain store sales has accompanied the spurt in gasoline prices. Last week, gasoline prices were about stable w/w at $2.61 per gallon, a level up 46% since the start of this year. The spot price of gasoline this week is up another 10% w/w.

The leading indicator of chain store sales from ICSC gave back half of the prior week's rise. The indicator's recent erratic movement has left the August average 0.3% below July which fell 0.4% from June.

The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

Reflections on central banking, remarks by Federal Reserve Chairman Alan Greenspan, are available here.

ICSC-UBS (SA, 1977=100) 08/27/05 08/20/05 Y/Y 2004 2003
Total Weekly Chain Store Sales 455.5 456.8 3.9% 4.6% 2.9%
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