With all due respect to the analysts, journalists and consultants who make a living keeping track of all the companies that comprise the retail industry, it has been my opinion for some time now that the popular measures reported on the first Thursday of every month known as comparable store sales, which so many of us spend at least a day per month thinking and talking about, are like George Clooney’s S.A.T. scores. They just don’t matter.
Only about 20 retail companies – a small minority of the publicly-held merchants who sell discretionary consumer products – report their total and same-store sales on a monthly basis today. This is a sharp decline from 5 years ago, when virtually all publicly-held retailers reported.
Many of them stopped reporting because it was “causing too much volatility in stock prices.” (I guess we should thank them all for reducing the volatility in the stock market.) Others claimed it was “causing management to focus too much on the short term and not enough on longer term initiatives.” Whew. Thank goodness they nipped that problem in the bud, too.
To really grasp how insignificant same-store sales figures have become, let’s consider for a moment the companies who no longer report. Walmart, the largest retailer in the country, representing half of all retail sales, stopped reporting in early 2009, after the news got so bad month after month that someone in Bentonville finally figured out they were important enough to not have to share it anymore. Quickly following Walmart’s lead were Sears, most of the regional discounters, and the dollar stores.
Stealth giant Amazon never did report same-store sales. I guess it’s because they don’t have stores. But they certainly do a lot of sales – sales that used to be done by stores.
Only one warehouse club, Costco, still reports on a monthly basis. Big box retailers Best Buy and Bed Bath and Beyond do not. In the women’s specialty apparel sector, we know how Gap, Limited Brands, and Wet Seal are doing, and that’s about it. About the other major players, like Ann Taylor, Talbots, Chicos, Express, Urban Outfitters, Dress Barn, Charlotte Russe, Charming Shoppes, Christopher & Banks, New York & Co. – we learn nothing.
And it’s not just the women’s merchants who are remaining mum. There’s no news from Men’s Wearhouse, Joseph A. Banks, or Casual Male, either. Throw in Children’s Place, Abercrombie, American Eagle, American Apparel and Aeropostale to that list while you’re at it. The only teen store still reporting is Kearney, Nebraska-based Buckle, whose monthly performance has been so good for so many years they can hardly contain themselves when the first of the month rolls around.
So what are we left with? The department stores, off-pricers, one discounter (Target) and one luxury store (Saks). Big stores, to be sure, but representing less than a third of retail sales, making it impossible to glean from the data whether the market’s growing or shrinking, or which retailer or channel is gaining share from another.
Complicating the situation even further is the fact that some of the big stores, like Macy’s, Penney and Nordstrom, have started to include their e-commerce sales in same-store sales. (Huh?) With online sales growing by double digits, all this does is introduce even more confusion and insignificance to the measure.
I have therefore concluded that those companies who report monthly same-store sales should just stop. Macy’s, Gap, Target, TJX and friends should just post their comps every quarter like the rest of the market does. At least we’ll have something meaningful to look at, especially considering the profitability figures that come along for the ride. It would also give us all an extra day per month – if not more – to do other things, like focus on longer term initiatives.
Or spend more time watching George Clooney movies.