Same-store sales indexes
Two of the most well known same-store sales indexes in the US, the ICSC Goldman Sachs Same Store Sales Index and the Johnson Redbook Index, increased 3.1% and 1.9%, year-over-year, respectively. The increase in these two indexes indicates positively changing spending patterns of consumers in the US economy. In the chart below, we can see how the change in the ICSC Goldman Sachs Index has correlated with the XRT Retail ETF.
What do these numbers mean?
An increase in these two indexes means that consumers are going back to the stores and buying goods, which is good news for brick and mortar retail stores like Macy’s (M), Kohl’s (KSS), Nordstrom (JWN), and JCPenny (JCP). All of these companies are part of the SPDR S&P Retail ETF (XRT). If consumer spending increases, it also means top line organic growth for the retailers, which is an extremely positive sign for the stock market and the bond market.
Same-store sales can be highly volatile between different sub-sectors of retail in changing conditions of the economy. Thus, we’ll take an in-depth look at the condition of the retail sector in the next part of the series.