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Economy in Brief

Weekly Chain Store Sales Likely Suffered From Price Discounting
by Tom Moeller January 12, 2010

The holiday spirit faded last week. That was reflected in a 3.0% w/w decline in chain store sales which left purchases at the lowest level since March of last year. Nevertheless, sales rose 1.7% y/y. Most likely the latest weakness as much reflects post-holiday price discounts as a decline in sales' volume.

The ICSC-Goldman Sachs 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.During the last ten years there has been a 69% correlation between the year-to-year growth in chain store sales and the growth in general merchandise retail sales. The weekly figures are available in Haver's SURVEYW database.

Also suffering from post-Holiday blues was the leading indicator of chain store sales. It slipped marginally early in January but its level was near the highest since January of last year. This composite leading economic indicator is compiled from four series: (1) the MBA's volume index of mortgage applications for home purchase (2) the ABC News/Money magazine's survey of consumer buying conditions (3) new filings for jobless benefits and (4) the 30-year government bond yield

ICSC-UBS (SA, 1977=100) 01/09/10 01/02/10 12/26/09 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 482.6 497.6 490.1 1.7% 0.1% 1.4% 2.8%
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