Weak “Back-to-School” Sales Spell Trouble for Holidays

WSJournal, Sep 2, 2009. Shoppers are focusing on deals and limiting buying mainly to necessities, based on August sales estimates that herald another tough holiday season for beleaguered retailers.

Shopping Woes - Decline in Retail Sales in Aug 200Despite sales tax holidays in several states designed to spur sales, back-to-school spending remains lackluster, according to industry experts. Retailers’ recent efforts to shake customers from deep discounts and spur buying by tightly controlling inventories are fizzling.

Specialty clothing store sales fell in August, an indicator of the poor results expected Thursday when retailers report their back-to-school sales.

Continued weak demand is raising new worries about the retail outlook for Christmas.

Now, retailers that traditionally rely on back-to-school sales as an barometer of demand for the remainder of the year face tough choices on stocking and hiring. Customers should find ever slimmer pickings and fewer clerks as stores hold off on early holiday orders and further trim costs.

The decrease in this closely watched measure of retailers’ health would be the 12th consecutive month of sales declines.

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