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.

Target also said that sales in June are trending "well below plan." Previously, the company had said sales would likely come in at the low end of its 5% to 7% guidance. The company had a total 4.6% increase in May and a 0.8% increase in June 2003.

While big clearance sales and the shift of the Fourth of July holiday into July hurt results, some analysts have speculated that spending in the discount sector has been hurt because more consumers are willing and able to buy higher-end merchandise. Consequently, results at luxury retailers like Nordstrom ( JWN) and Saks ( SKS) should continue to outpace the rest of the sector.

The best hope for June 2004 is that shoppers stayed optimistic though the month. Consumer confidence in June jumped to a reading of 101.9 -- a two-year high -- from a revised reading of 93.1 in May, according to the Conference Board. That compared with a reading of 83.5 in June 2003.

Hastings agrees that the consumer is doing fine. "Things are looking up. The summer oil and gas crisis never materialized, and gas prices ... are steady." He noted that part of the reason for the confidence is that consumers are spending on big-ticket purchases, such as houses and cars, before interest rates jump.

Piper Jaffray analyst Jeffrey Klinefelter thinks the beginning of back-to-school apparel shopping in the second half of the month could lift a group of specialty retailers, including Aeropostale ( ARO), Abercrombie & Fitch ( ANF) and American Eagle Outfitters ( AEOS). (Piper Jaffray makes a market in securities of the companies mentioned.)