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Johnson Redbook Retail Sales Index: Another Restaurant Indicator

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Johnson Redbook Retail Sales Index

The Johnson Redbook Retail Sales Index is another indicator of retail sales in the US. It rose to 1.6% in the week ending June 20, 2015. It was 1.1% the previous week. This index, like the ICSC-Goldman index, also fell YoY (year-over-year) from 3.1% in the same week last year. The Johnson Redbook Index indicates weaker data YoY. This confirms with the ICSC-Goldman index.

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Interpretation

The Johnson Redbook Retail Sales Index is meant to provide an advance indication of trends in retail sales. The depressed Johnson Redbook Index for 1H15 can be a concern for restaurant investors.

The Johnson Redbook Index tracks the trends in retail sales. It’s reported on a weekly basis. The index is made up of sales data from retailers and general merchandisers like apparel stores, discounters, department stores, and home improvement stores. The ICSC-Goldman index reports consumer spending data on a weekly basis—it’s similar to the Johnson Redbook Index.

Although Redbook doesn’t include restaurant sales, investors can look at this indicator and get a sense of where the economy is headed from the retail sales perspective. This would benefit investors in the Consumer Discretionary Sector ETF (XLY). XLY holds 0.3% of Darden Restaurants (DRI), 3% of Starbucks (SBUX), 1.5% of Yum! Brands (YUM), and 4% of McDonald’s (MCD).

Next, we’ll discuss the weekly gas prices and provide key takeaways for this series.

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