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Thanks in part to a lift from consumers who spent their economic stimulus checks disproportionately at discounters and warehouse clubs, Wal-Mart, BJ's Wholesale Club, Costco, and Target all reported increased July 2008 sales.
"Moderating gas prices and the last of the government stimulus checks gave retailers a slight boost in July, although sales were soft in general, which bodes ill for the back-to-school season in August," noted credit ratings and service company Bernard Sands, LLC's "Weekly Ratings Alert" e-newsletter. "Discounters and warehouse clubs continued to be the preferred destination for many shoppers who were intent on stocking up on necessities and seeking bargains. Warehouse clubs Costco and BJ's were the stellar performers, while Wal-Mart [was among the] chains that showed gains."
Wal-Mart Stores, Inc.'s net sales for the four-week period ending Aug. 1, 2008 included $18.747 billion for its Walmart U.S. division, a 6.7 percent increase from the $17.568 billion posted last year; $3.538 billion for Sam's Club, a 7.7 percent rise from the $3.284 billion reported in July 2007; and $30.159 billion for the total company, up 9.4 percent from the $27.579 logged in the year-ago period.
Comparable-store sales for the four-week period rose 3 percent for Walmart, with no fuel impact, vs. 1.3 percent last year; 3.5 percent for Sam's Club (7.3 percent with fuel), vs. 5.1 percent (4.9 percent with fuel) in July 2007; and 3 percent for the total U.S. business (3.7 percent with fuel), compared with 1.9 percent in the year-ago period, with no fuel impact.
During the four-week period, Walmart's comparable-store sales grew in the grocery, entertainment, and health-and-wellness categories, according to Bentonville, Ark.-based Wal-Mart. Although home and apparel comps were slightly negative during the period, the stores had much cleaner inventory in these areas and so much less clearance than last year, according to the company.
Grocery was driven by strong sales in both food and consumables, and, despite Sands' prediction, Walmart said it expected the back-to-school momentum begun in July to carry through to August.
At Sam's Club, sales were driven by strengths in fresh food, dry grocery, and consumables, the company added, although softness continued in housewares and residential furniture.
"We estimate U.S. comparable-store sales, excluding fuel, for the August four-week period to be between 1 percent and 2 percent, because we still see sales volatility from week to week, especially around paycheck cycles," said Wal-Mart e.v.p. and c.f.o. Tom Schoewe.
BJ's Wholesale Club, Inc. was the best performer of the bunch, posting July 2008 sales of $773.2 million, a whopping 18.9 percent increase from the $650.5 million reported last year. Comparable-club sales for the month jumped 16.7 percent, including a contribution from sales of gasoline of 9.7 percent. In July 2007 the Natick, Mass.-based company experienced a comparable-club sales increase of 1.5 percent, including a negative impact from sales of gas of 0.6 percent and a negative impact from the absence of pharmacy sales vs. July 2006 of 0.4 percent.
Comparable-club food sales at the company grew about 10 percent each for July, the second quarter, and the first half of the year. According to BJ's, these strong increases were mainly attributable to higher perishable and consumable sales than last year.
For the month of July, departments with the strongest sales increases vs. last year included bakery, coffee, computer equipment, dairy, frozen, health & beauty, household chemicals, meat, oils & shortenings, pet food, paper, produce, snacks, small appliances and toys. Among the weaker departments compared with last year were books (reflecting last year's "Harry Potter" release), cigarettes, jewelry, major appliances, residential furniture, televisions and video games.
Gasoline helped give comparable-store sales a boost for Issaquah, Wash.-based Costco Wholesale Corp., which saw comps of 10 percent for the month of July, including the four weeks ended Aug. 3.
The average sales price per gallon of gasoline went up, as compared with the year-earlier July. Excluding this gas price inflation (the price of gas increased 41 percent over last year), U.S. comps would have been up 6 percent. Sales for the month were $5.70 billion, up 14 percent from $5.02 billion last year.
For the first 48 weeks, Costco sales were $65.54 billion, up 13 percent from $58.19 billion last year.
Meanwhile Minneapolis-based Target Corp. reported that its net retail sales for the four weeks ended Aug. 2, 2008 increased a relatively modest 4.7 percent to $4,566 million, from $4,363 million for the four weeks ended Aug. 4, 2007.
July comparable-store sales went down 1.2 percent, however. In a monthly recorded sales message, the company attributed the decrease to a decline in the number of transactions, offset by an increase in transaction size.
"Our comparable-store sales performance in July was near the low end of our -1 percent-to-+1 percent planned range," noted Target president and c.e.o. Gregg Steinhafel.