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Economy in Brief

Chain Store Sales Slide, Gasoline Prices Up
by Tom Moeller March 28, 2006

Chain store sales slid 1.6% last week, according to the International Council of Shopping Centers (ICSC)-UBS survey.The w/w drop followed a 0.1% decline during the prior period and rounded a lackluster March when sales ended the month about 1.4% lower than at the start.

The average level of sales in March nevertheless rose roughly 1.0% versus the prior month due to a strong gain at the end of February.

During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.

The leading indicator of chain store sales ticked up 0.2% after the prior week's 0.3% decline and in March is up 0.1% versus February.

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.

Higher gasoline prices during March certainly did little to aid chain stores. Last week, the average retail price for regular gasoline held steady w/w at $2.50 per gallon (+16.0% y/y) but that followed a fourteen cent w/w jump the prior period and a fifteen cent rise in the monthly average versus February. During March, gasoline prices were at their highest since last October.

In spot market trading, yesterday's price for regular unleaded gasoline of $1.82 per gallon was up four cents from last week's average. U.S. demand for gasoline rose 1.2% from the February average (+0.3% y/y) during the latest four weeks though the very latest figures showed a decline w/w.

ICSC-UBS (SA, 1977=100) 03/25/06 03/18/06 Y/Y 2005 2004 2003
Total Weekly Chain Store Sales 462.4 470.0 2.7% 3.6% 4.7% 2.9%
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