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September Retail Sales Slow Due to Rising Fuel Prices
October 4, 2005
ShopperTrak’s Bill Martin on CNBC
MICHELLE CARUSO-CABRERA, host:
Gasoline prices have been punishing drivers at the pumps for weeks now. But are there signs this pocketbook pain is finally slowing down shoppers? Joining us now first on CNBC with his firm's latest read on retail is Bill Martin, co-founder of ShopperTrak. He joins us now from Chicago. Good to see you again, Mr. Martin.
Mr. BILL MARTIN (Co-founder of ShopperTrak): Good to see you, Michelle.
CARUSO-CABRERA: Let's get right to the numbers. How did retail sales fare in September, especially in light of the high gasoline prices caused by Hurricanes Katrina and Rita?
Mr. MARTIN: Well, we worked the numbers last night. While September came in as a positive growth rate over last year at 3.9 percent, it's below average for the year, which is running at about a 5 percent increase. So, it's disappointing to the retail sector.
CARUSO-CABRERA: OK. Do you think that's a reflection of these high gasoline prices?
Mr. MARTIN: Well, I think it is. Clearly some of the economic news is starting to get to the American consumer. We look at the South, and we saw some dramatic effects from the storm, etc. When you look at the gas prices, which ordinarily you think would go down at the end of the summer, continue to remain pretty high. That saps the energy.
CARUSO-CABRERA: That's not just in the South, but across the entire nation where we're seeing that.
Mr. MARTIN: Yes, it is.
CARUSO-CABRERA: Let's look just at last week's sales. How did they do, and are there any trends emerging there that might give us a clue about October, where we are right now?
Mr. MARTIN: Well, for the week ending October 1st through the last week in September, we saw a rise from the previous week of 6.9 percent. But that rise only was about 0.7 percent increase over last year.
September is sort of a month where retail likes to catch their breath after the back-to-school season and just before the spring and the holiday season. It still indicates a 0.7 percent increase over the previous year, a little bit of sluggishness there.
CARUSO-CABRERA: That would mean a lot more to make up for as we head into the holiday season. Already there's talk that this holiday season is going to be a nail-biter for the retailers. You monitor the consumer constantly. What is your sense, overall, of the health of the consumer as we head into what is the very pivotal fourth quarter?
Mr. MARTIN: Well, it's anybody's guess at this time, with the downturn in September. We don't know what to make of that yet. That's certainly off the average of what we've seen over the last four months, which has been above average. So, we need to look at the first couple of weeks of October to see if we can get off to a good start.
CARUSO-CABRERA: Can you drill down at all into the numbers and tell us? Are there particular areas of retail that are at least faring better, or where you really saw the impact as a result of people slowing down their spending?
Mr. MARTIN: We know that in the beginning of the year, that luxury goods were doing quite well. That has softened a little bit, but still holds its own. We think that the mass merchants are probably doing well based on the pressure from the gas pumps.
CARUSO-CABRERA: How do you define mass merchants? Are you talking about department stores, or the Wal-Marts of the world?
Mr. MARTIN: Mostly the Wal-Marts and the Targets of the world.
CARUSO-CABRERA: OK. Mr. Martin, thank you.
Mr. MARTIN: Thank you.
CARUSO-CABRERA: Bill Martin is co-founder of ShopperTrak.
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