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Economy in Brief

Chain Store Sales Continue Sideways Movement
by Tom Moeller   November 02, 2010

Consumers continue to shy away from the chain-store checkout counter. Last week, chain store sales ticked up all of 0.1% after a 0.3% gain the prior week. These increases, however, left the October average down 0.7%. The decline roughly equaled those of the prior two months. Since the July high, sales have fallen 3.0%. During the last ten years there has been a 68% correlation between the y/y change in chain store sales and the change in retail sales at general merchandise stores. That correlation recently has increased. General merchandise store sales account for 15% of total retail sales.

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.

The leading indicator of chain store sales slipped 0.2% last week for the third w/w decline. Nevertheless, the index was 2.3% above the January low. The 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) 10/30/10 10/23/10 10/16/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 500.9 500.2 498.7 2.0% 0.1% 1.4% 2.8%
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