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Business

Stores see small revenue gains from wary shoppers

Stores deepened discounts more than planned last month to draw recession-scarred shoppers. But shoppers bought mostly items they needed, resulting in small revenue gains.

The mixed results from June, released Thursday, are raising concerns about the back-to-school season and consumers' willingness to hit the accelerator on spend.

The International Council of Shopping Centers' index of June retail sales rose 3 percent, the low end of its growth forecast that ranged from 3 to 4 percent. But that's compared with a 5.1 percent decline in June 2009.

The figures are based on revenue at stores open at least a year and are a key indicator of retailers' health.

The third straight month of modest sales gains after a surprisingly solid start to the year underscores the choppiness of the recovery and puts more pressure on retailers to come up with innovative tactics to get shoppers to spend instead of just resorting to price slashing.

Back-to-school merchandise starts flowing into stores next week; it accounts for almost 40 percent of total retail revenue from July through September, Michael P. Niemira, ICSC's chief economist, estimates.

Analysts say it was hard to discern clear trends in June's figures. Department stores like Macy's and J.C. Penney Co. fared much better in June than mall clothing chains, a sign that the department stores' push for exclusive merchandise is paying off. - AP

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