July Sales Better; Back-to-School Looks Worse

Retail sales may have seen a lift last week, but the back-to-school season threatens to end the summer with a thud.

For the week ended July 18 sales rose .5%, according to the International Council of Shopping Centers and Goldman Sachs. "Although this week's sales uptick was modest, its breadth was widespread, with a strong spurt of customer traffic across most segments of the industry," Michael P Niemire, ICSC chief economist said in a statement.

But this good news was dampened by yet another back-to-school survey noting that consumers are cutting back on purchases.

Only 33% of parents are expected to spend more than $400 this year, compared with 47% last year, according to a survey conducted America's Research Group and UBS.

This follows a report released by Deloitte yesterday, which revealed that 64% of shoppers plan to spend less on back-to-school items.

The National Retail Federation said last week that the average family with students in grades kindergarten through 12 is expected to spend $548.72 on school merchandise, down 7.7% from last year. NRF predicts total back-to-school spending will reach $17.42 billion.

Retail shares were awash in red Tuesday morning, as the S&P Retail Index fell 1.4% to 337.63.

Teen specialty retailers felt some pangs, with Aeropostale(ARO Quote) down 2% to $37.54, Abercrombie & Fitch(ANF Quote) sliding 1% to $25.82 American Eagle Outfitters (AEO Quote) sinking 3% to $14.18 and Buckle(BKE Quote) descending 4% to $31.03.