Retail sales in June were probably the weakest of the year so far, and could mark an early start to the growth deceleration most analysts foresee in the back half of 2004.

Several things weighed on consumer spending last month, including cold, rainy weather, high gas prices and several holiday calendar shifts. Discounters could bear the brunt of the pain, despite having the easiest comparisons over last year.

Same-store sales in June likely rose by 3% to 3.5%, according to Michael Niemira of the International Council of Shopping Centers. He cited the weather for the lackluster performance and noted the warnings last week from discounters Wal-Mart ( WMT) and Target ( TGT).

June's expected results would compare with June 2003's 2.4% aggregate increase, according to ICSC data, and would be lower than the prior months in 2004, when growth ranged from 7% in March to 4.4% in April.

Looking at the big picture, the significance of any June is generally low compared with other months. "It's a transitional month," said Richard Hastings, retail analyst at Bernard Sands. That might not the case in 2004.

"June is going to turn out to be the month that signals the beginning of moderation of retail chain stores and of consumer spending," said Hastings. Hastings said aggregate same-store sales will probably return to more normal annualized growth rates of 3% to 4% each month for the rest of the year.

Still, analysts have expressed concern since early 2004 that it will be harder for most retailers to show strong gains in monthly same-store sales in the second half, in part because of the strength of the 2003 back-to-school season. July to September saw some of the best retail sales gains of 2003, with September growth the year's highest at 5.9%.

Expectations are low after Wal-Mart -- the world's largest retailer by revenue -- said last week that it now expects same-store sales to rise 2% to 4% in June, down from a prior estimate of 4% to 6% gains. Wal-Mart cited lower demand for Father's Day merchandise and weak air conditioner and swimming pool supplies.

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