Sales Trends End for Saks and Buckle, Tandy Bucks Weather & Recessionary Trends

News Analysis of U.S. Retail Industry June, 2009 Same Store Sales Figures

Luxury is moving back to exclusivity, the position it occupied before the appeal of a broader market of trading-up consumers lured it into a position of aspirational accessibility. Even opulence is getting back to basics in this retail recession.

Global business consulting firm Bain & Co predicts that luxury retailing isn’t going to find firm footing again until 2012. And while middle and lower class Americans are finding it difficult to muster up any compassion for the plight of the recessionary millionaire, a three-year recovery in the upper echelons of retail consumption is not positive news for anyone.

Bain & Co. estimates that the wealthiest 10% do 50% of consumer purchasing in the U.S. And since 70% of the U.S. gross domestic product comes from consumer spending, it would be to everyone’s benefit for the richest rich to return to their extravagant ways. The economy would benefit from getting some of those dollars of shameless excess back into circulation.

While last month’s numbers broke the Saks losing streak, June’s same store sales figures also broke the winning streak of one of the brightest stars of the retail recession. For the first time in 22 months, Buckle failed to deliver a double-digit same store sales increase last month. The company’s 9.6% increase can’t exactly be considered a failure, however, and anyone who is gravely disappointed in the company’s performance will have to work hard to justify that disappointment.

Drilling deeper into Buckle’s June numbers reveals a 31% increase in women’s apparel sales, a 23% increase in accessories, a 16% increase in footwear, and a 7.5% increase in the average transaction last month when compared with the same period last year. There’s not a lot to be upset about there, but even a small downtick in Buckle's performance causes a little angst with experts and analysts. There is a certain amount of security in seeing a few solid recession-proof retailers on the plus side of the same store sales list each month. It’s a little disconcerting to observe Buckle's topside slippage, no matter how small.

One U.S. retailer that has not slipped in delivering consistently positive same store sales results in 2009 is Tandy Leathercraft. While cool and wet weather was taking the blame for keeping shoppers out of stores in June, apparently the consumption of leatherworking materials is impervious to weather conditions. In fact, the retail sale of leather craft supplies seems to be generally unaffected by all external conditions.

A look at the 2009 same store sales comparison chart shows that Tandy’s retail stores have bested their 2008 performance every month this year. In a general sense, this seems to defy all recessionary trends. With consumers cutting back to essential spending, it doesn’t seem logical that leather products of any kind would not be on the same shopping list with toothpaste, toilet paper, and store brand canned vegetables.

In theory, a do-it-yourself attitude is aligned with economic downturn, but companies like Michaels, Jo-Ann Fabrics, Home Depot, and Lowe’s haven’t exactly been posting sales numbers that reflect a bourgeoning population of handicrafters. Yet, the Tandy team has somehow continued to cultivate a demand for animal hides, rivet setters, belt buckles, and biker wallet kits at its 74 retail stores in 35 states. They deserve a lot of credit for that.

Investors might be nervous that Tandy’s solid performance might flounder after the company’s co-founder, Ron Morgan, retired from his CEO position last month. But since the new leader, Jon Thompson, has worked with the company for its entire history, it’s likely that the current positive status quo will be easily maintained.

So, what did we learn from the latest batch of monthly same store sales figures? While some analysts and experts are working hard to draw credible inferences about back-to-school and holiday season sales based on June's performance, the climate of instability that exists around the globe renders those predictions to be not much more than a 50-50 guess. In reality, what we saw last month is just more of the same, even though we're straining to find indications of change for the future.

Heads, the retail industry won't sell as much stuff this month as it did in the same time period last year. Tails, the retail industry will continue to be recessed. It's a safe bet either way.

More Key U.S. Retail Industry Numbers:

• 2009 Same Store Sales Comparisons
• Store Closings and Liquidations in 2009
• Restaurant Chains Emerging in Recession