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Rebates take July heat off retailers

Posted Monday, August 18, 2008

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With a little help from the last of the rebate checks, retailers were able to continue the sales momentum seen through much of the summer. According to the National Retail Federation, retail industry sales for July (which exclude automobiles, gas stations, and restaurants) increased 0.3 percent seasonally adjusted month-to-month and rose 4.7 percent unadjusted over last year.

July retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 0.1 percent seasonally adjusted from the previous month but increased 4.5 percent unadjusted year-over-year. June retail sales were also revised up to a 0.3 percent increase from May, after the Commerce Department initially said June sales rose only 0.1 percent.

“While discounters were the biggest beneficiaries of rebate checks, consumers were still spreading the wealth among other retailers,” said NRF Chief Economist Rosalind Wells. “Because most of the rebate checks have already been distributed, retailers will face increased challenges generating sales in the months ahead.”

Most retail categories enjoyed strong gains in July. General merchandise retailers, including discounters, were clearly big winners for the month, as sales in these stores increased 0.3 percent seasonally adjusted from June and rose a spectacular 6.4 percent over July 2007. Health and personal care stores’ sales were flat (0.0%) from the prior month, but saw an increase of 4.4 percent unadjusted year-over-year.

Clothing and clothing accessories stores sales increased 0.2 percent seasonally adjusted from last month and climbed 3.1 percent unadjusted year-over-year. Electronics and appliance stores also saw solid growth with sales increasing 0.8 percent seasonally adjusted from June and 5.9 percent unadjusted over the same period a year ago.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

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