Retail's Invisible Sales

NEW YORK (TheStreet) -- When same-store sales are released next week, it may appear retail is on the road to recovery. But don't be fooled, same-store sales have become a weak barometer for measuring the health of retailers and the consumer.

For one, September marks the beginning of easier comparisons for most retailers, and it's hard not to achieve a strong report card when you're being graded on a curve against historically dreadful quarters.

As a result, the International Council of Shopping Centers is forecasting a slight 2% decline in September sales, a significantly tamer slide than the past several months.

Same-store sales, or sales at stores opened at least a year, also fail to take into account a growing e-commerce business -- or for the fact that those growing online sales, by their nature, pull business from the stores themselves.

In the most recent quarter, the majority of retailers reported slumping comparable results, which were punished by investors. But increases in online sales went largely unnoticed.

Gap(GPS Quote), for one, is a quintessential example of a retailer that is seeing lower comps and higher online sales. In its second quarter, which ended Aug. 1, its same-store sales decrease 8%, while its Web sales spiked 17% to $191 million.

Even more telling, Gap's Internet sales now account for nearly 7% of total sales, up from 5.5% in the year prior.

Other retailers also saw some modest gains in their online businesses: Barnes & Noble(BKS Quote) saw second-quarter comparable sales sink 6.9%, while online sales inched up 2.2%; Nordstrom(JWN Quote) reported a same-store sales decline of 9.8%, while web sales for the second quarter grew 3.5%.

None of which means that buoyant Internet sales are compensating for what has been one of the worst consumer pull-backs of a generation, but their growing relevance should make investors and analysts rethink how much weight they ascribe to same-store sales reports.