Retailers Report Lackluster Back-to-School Sales

Although most c-store operators have been reporting positive results this year, other retailers who rely heavily on back-to-school business reported very mixed sales this year. It appears that despite new fashion trends and several must-have consumer electronics products, this year's back-to-school selling season was dragged down by dwindling consumer confidence and high gas prices.

The Wall Street Journal reported yesterday that teens flocked to a few fashionable chains for early fall apparel, but many mall-based merchants continued to struggle with sluggish traffic and markdowns. Wal-Mart reported its U.S. same-store sales for August rose 2.7 percent, which was at the high end of its earlier 1 percent to 3 percent forecast. However, some analysts said the world's largest retailer was very aggressive with promotions. Target reported a 2.8 percent increase in same-store sales, below analysts' projections of a 3.1 percent gain.

Of the 40 retailers that reported same-store sales results so far, 21 beat estimates, while 19 missed, according to Thompson Financial.

The Journal article also noted that:
-- Tax holidays and summer clearances helped drive retail traffic.
-- Consumers made purchases closer to the start of the school year.
-- Parents were more cautious about spending, focusing on shopping list essentials and bypassing discretionary items.
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