The week ahead

Tom Hudson: Retailers predict disappointing back-to-school sales


Special to The Miami Herald

Parents are counting down the days until the new school year starts. Retailers are counting the days left in the back-to-school shopping season, getting anxious about the start of the new school year.

The back-to-school selling season is second only to the holiday season for America’s retailers. Even before it began, the National Retail Federation had predicted parents and kids would spend 12 percent less this year on school supplies, clothes and electronics compared to last summer.

On Tuesday, the Department of Commerce releases July retail sales, giving investors an early peek into the back-to-school season. But already we have heard from specific stores about a slow start. Teen retailers American Eagle Outfitters and Aeropostale both warned investors of weaker than expected business. Both blamed the need to cut prices to move merchandise off their shelves.

OK, but everyone knows teens have fickle fashion tastes. What about the basics? Warehouse bulk retailer Costco saw it’s July sales up less than expected. Much of that was blamed on converting sales at Costco’s 181 international stores back to U.S. dollars. Costco didn’t discuss customer traffic or pricing though.

Like a kid forgetting to do his homework, there are plenty of excuses for disappointing results from retailers. Many stores have stopped updating investors on their monthly figures over concerns it feeds into the shortsightedness of the stock market at the expense of long-term business strategy. So instead, we have to look at the monthly report card for the entire industry to judge its progress.

Tom Hudson is a financial journalist. He hosts the Sunshine Economy on WLRN-FM in Miami. He is the former co-anchor and managing editor of Nightly Business Report on public television. Follow him on Twitter @HudsonsView.

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