uploads///Redbook

Key retail sales indices show weak post-holiday spending

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Jan. 26 2015, Updated 2:40 p.m. ET

Retail sales indices

Same-store sales are a crucial measure for retailers, indicating the change in sales excluding the impact of store openings and closures.

There are two key retail indices that provide details about US same-store sales on a weekly basis. The first one is the Johnson Redbook Index, which is released by Redbook Research Inc. The other key index is the Weekly Retail Chain Store Sales Index compiled by Goldman Sachs and Retail Economist. It was formerly known as the ICSC-Goldman Sachs Retail Index.

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Johnson Redbook Index

 The Johnson Redbook Index tracks retailers across six categories:

  • apparel specialty
  • department
  • discount
  • furniture
  • drug
  • miscellaneous

Its latest release on January 21, 2015, reported a 3.5% month-over-month decline in US retail same-store sales for the week ended January 17, 2015. Retailers usually sell their products in January at discounted prices to clear holiday inventories.

The index was up by 3.0% in the week ended January 17, 2015, compared to the previous year. According to Redbook’s latest report, January sales are expected to be up 3.6% compared to the previous year and down 3.3% compared to the previous month.

Retail Economist-Goldman Index           

The Retail Economist-Goldman Sachs Weekly Retail Chain Store Sales Index for the week ended January 17, 2015, fell 1.3% compared to the previous week, on a seasonally adjusted basis. The retail sales index increased by 3.4% on a year-over-year basis.

Key takeaways

Unfavorable movements in the retail sales indices negatively impact the shares of department stores such as Macy’s (M), Nordstrom (JWN), Kohl’s Corporation (KSS), and JCPenney Company (JCP).

These department stores are part of the consumer discretionary sector exchange-traded funds, or ETFs, including the Consumer Discretionary Select Sector SPDR Fund (XLY). The XLY ETF and the retailers selling consumer discretionary products benefit when consumer spending increases.

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