• Reminder:  We like to look at the Commerce Department data on a comp basis (year-over-year change).  Hey, it’s government data, so caveat emptor.  See link.
• Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +4.2% year-over-year sales improvement in July 2010.  This compares to the +4.4% increase in June 2010 and a +4.1% increase in May 2010. 

That said, the 2-year run rate continues to decline.  Also, July 2009 represented the ‘bottom’ a year ago.  Today’s results were a disappointment relative to the lapping of last year’s dismal results.

The most compelling category specific storylines in July 2010 were:

(1)  If Motor Vehicles & Parts Dealers stay on a similar 4-year run rate, autos should report flattish year-over-year sales in August 2010.  Is this why GM’s CEO departed in sudden fashion this week?

(2)  Electronics & Appliance Stores reported an improved growth rate in July 2010 versus June 2010 and the category has sequentially improved in each month since February 2010.

(3)  In July 2010, 2-year growth rates continued to decelerate.

• Monthly “big picture – what’s happening at the mall” year-over-year results in calendar 2009/2010:

• Reminder:  We like to look at the Commerce Department data on a comp basis (year-over-year change).  Hey, it’s government data, so caveat emptor.  See link.
• Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +4.2% year-over-year sales improvement in June 2010.  This compares to the +4.2% increase reported in May 2010 and a +4.5% increase reported in April 2010. 

That said, the numbers were disappointing on a 2-year run rate basis and point to an anomalous spike in February/March 2010 (2-year basis) that appears to have been a mirage.

Keep an eye on July 2010 as July 2009 represented the ‘bottom’ on a YOY and 2-year basis.

The most compelling category specific storylines in June 2010 were:

(1)  Year-over-year growth in the Furniture & Home Furnishings category continues to decelerate from the spike that was reported for March 2010. 

(2)  Clothing & Clothing Accessory Stores and Department Stores reported a materially improved year-over-year growth rate in June 2010 versus May 2010.

(3)  Electronics & Appliance Stores reported an improved growth rate in June 2010 versus May 2010 and the category has sequentially improved in each month since February 2010.

• Monthly “big picture – what’s happening at the mall” year-over-year results in calendar 2009/2010:

• Below, we show year-over-year results in Q1 2009 (Jan-Mar), Q2 2009 (Apr-Jun), Q3 2009 (Jul-Sep), Q4 2009 (Oct – Dec), Q1 2010 (Jan – Mar), and Q2 2010 (Apr – Jun).

Most categories improved in Q1 2010 relative to Q4 2009 (excluding Health & Personal Care).  But, the results in Q2 2010 relative to Q1 2010 were mixed.

• Below, we show 2-year run rates in Q2 2010 (Apr-Jun) versus Q1 2010 (Jan – Mar).

All categories delivered worse 2-year results in Q2 2010 versus Q1 2010 excluding Furniture & Home Furnishings and Motor Vehicles & Parts Dealers.

• Reminder:  We like to look at the Commerce Department data on a comp basis (year-over-year change).  Hey, it’s government data, so caveat emptor.  See link.
• Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +4.9% year-over-year sales improvement in May 2010.  This compares to the +4.7% increase reported in April 2010 and a +5.4% increase reported in March 2010.  It’s not all doom and gloom at the mall.

That said, the numbers were disappointing on a 2-year run rate basis and point to an anomalous spike in February/March 2010 (2-year basis) that appears to have been a mirage.

The most compelling category specific storylines in May 2010 were:

(1)  The Building Materials, Garden & Supply category sales sharply decelerated.  Year-over-year growth spiked an anomalous +13.9% in April 2010 only to decelerate to +3.1% in May 2010.     

(2)  Every category except Motor Vehicles & Parts Dealers reported a 2-year run rate deceleration in May 2010 versus March 2010.  But, even the Motor Vehicles & Parts Dealers category reported a 2-year run rate deceleration in May 2010 versus April 2010. 

(3)  Big-ticket appears to be relatively stronger of late.  Electronics & Appliance Stores reported an improved growth rate in May 2010 versus March/April 2010.  Furniture and Home Furnishing Stores reported a stronger year-over-year result in May 2010 than April 2010.

• Monthly “big picture – what’s happening at the mall” year-over-year results in calendar 2009/2010:

January 2009	-1.4% (+1.7% 2-year)
February 2009	-0.3% (+1.8% 2-year)
March 2009	-2.1% (-0.1% 2-year)
April 2009	-2.9% (+0.9% 2-year)
May 2009	-3.3% (+0.2% 2-year)
June 2009	-3.5% (+0.4% 2-year)
July 2009	-3.9% (-0.5% 2-year)
August 2009	-2.3% (+0.5% 2-year)
September 2009	-0.4% (+0.7% 2-year)
October 2009	+0.7% (+0.8% 2-year)
November 2009	+1.6% (+0.3% 2-year)
December 2009	+3.5% (+0.5% 2-year)
January 2010	+2.8% (+1.3% 2-year)
February 2010	+3.7% (+3.4% 2-year)
March 2010	+5.4% (+3.2% 2-year)
April 2010	+4.7% (+1.7% 2-year)
May 2010	+4.9% (+1.4% 2-year)

• Most categories reported a deceleration in May 2010 versus April 2010.  Categories that posted the worst deceleration were (ex-Gasoline Stations): 
  • Department Stores                          -2.8% May 2010 vs. -0.7% April 2010
  • Clothing & Accessories Stores        +4.1% May 2010 vs. +7.1% April 2010
  • Building Material & Garden            +3.1% May 2010 vs. +13.9% April 2010
  • Motor Vehicle & Parts Dealers         +11.2% May 2010 vs. +15.2% April 2010

• Despite deflationary headwinds, Food & Beverage Stores: Grocery Stores returned to solidly positive territory in November 2009 through January 2010.  The group had gone negative in April 2009 for the first time since December 2002. 

In February – May 2010, the category reported a dramatic acceleration in year-over-year results versus January 2010. 

• Electronics & Appliance Stores delivered its first positive year-over-year result in March 2010 since July 2008.  The category may have the easiest year-over-year comparison in Q2/Q3 as it laps a massive degradation in Q2 2009 and Q3 2009 (i.e. -13.0% in Q2 2009 and -11.2% in Q3 2009).  

Similar to many categories, 2-year growth has slipped since March 2010.

• Non-Store Retailers continues to be the ‘story’ for calendar 2010 thus far.  2-year run rates materially improved in each of December 2009, January 2010, and February 2010.  The category has reported stronger year-over-year growth thus far in calendar Q2 than calendar Q1.                 

* Reminder:  We like to look at the Commerce Department data on a comp basis (year-over-year change).  Hey, it’s government data, so caveat emptor. See link.

* Once a year the Commerce Department adjusts all historical monthly data.  So, we’ve adjusted our spreadsheet to reflect the new numbers.

* Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +4.8% year-over-year sales improvement in April 2010.  This compares to the +5.5% increase reported in March 2010.

The most compelling category specific storylines in April 2010 were:

(1) Building Materials, Garden & Supply category sales sharply accelerated.  Year-over-year growth increased +12.1% versus LY.  This is the second straight month of positive results versus LY (+4.1% in March 2010).
While we continue to have concerns with margins, we’re now forced to take our revenue estimates for HD/LOW higher.

(2) Most categories reported a 2-year run rate deceleration in April 2010 versus March 2010 (ex-Building Materials, Motor Vehicles & Parts Dealers, and Health & Personal Care).

(3) Electronics & Appliance Stores reported an improved growth rate in April 2010 than March 2010.  Most categories did not.

* Monthly “big picture – what’s happening at the mall” year-over-year results in calendar 2009/2010:

* Most categories reported a deceleration in April 2010 versus March 2010.  Categories that posted the worst deceleration were:

* Building Material & Garden Equipment Supplies Dealers reported its first positive year-over-year result in March 2010 since November 2007.  The category followed that up with a material +12.1% year-over-year increase in April 2010.

* Despite deflationary headwinds, Food & Beverage Stores: Grocery Stores returned to solidly positive territory in November 2009 through January 2010.  The group had gone negative in April 2009 for the first time since December 2002.

In February/March/April 2010, the category reported a dramatic acceleration in year-over-year results versus January 2010.

* Electronics & Appliance Stores delivered its first positive year-over-year result in March 2010 since July 2008.  The category may have the easiest year-over-year comparison in Q2/Q3 as it laps a massive degradation in Q2 2009 and Q3 2009 (i.e. -13.0% in Q2 2009  and -11.2% in Q3 2009).

* Non-Store Retailers have been the ‘story’ for calendar 2010 thus far.  2-year run rates materially improved in each of December 2009, January 2010, and February 2010.  The category faces much easier year-over-year comparisons in Q2 2010 (Apr – Jun) than Q1 2010 (Jan – Mar).

* Below, we show year-over-year results in Q1 2009 (Jan-Mar), Q2 2009 (Apr-Jun), Q3 2009 (Jul-Sep), Q4 2009 (Oct – Dec), and Q1 2010 (Jan – Mar).

Most categories improved in Q1 2010 relative to Q4 2009 (excluding Health & Personal Care).

* Reminder:  We like to look at the Commerce Department data on a comp basis (year-over-year change).  Hey, it’s government data, so caveat emptor.  See the link.

* Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +4.9% year-over-year sales improvement in March 2010.  This compares to the +3.3% increase reported in February 2010. 

The most compelling category specific storylines in March 2010 were:

   (1) Grocery category sales sharply accelerated for the second straight month;

   (2) Health & Personal Care was the only category to report a lower year-over-year result in March 2010 versus February 2010.  What’s the problem here?;

   (3) Non-Store Retailers continue to outperform and face dramatically easier compares in Q2; and

   (4) Motor Vehicles & Parts Dealers finally delivered a materially improved 2-year run rate in March 2010 than February 2010;

   (5) In Q2 2010, Electronics & Appliance Stores will anniversary a dramatic comp sales decline from a year ago (i.e. -12.6% in Q2 2009 versus -5.5% in Q1 2009). 
 

* Monthly “big picture – what’s happening at the mall” year-over-year results in calendar 2009/2010:

* Most categories posted improved year-over-year results in March 2010 versus February 2010.  Categories that posted worse year-over-year ‘comps’ in March 2010 versus February 2010 include:

   * Health & Personal Care                +1.9% March 2010 vs. +2.5% February 2010    

* Building Material & Garden Equipment Supplies Dealers reported its first positive year-over-year result in March 2010 since November 2007.  The category also reported a sharp improvement in the 2-year run rate. 

* Despite deflationary headwinds, Food & Beverage Stores: Grocery Stores returned to solidly positive territory in November 2009 through January 2010.  The group had gone negative in April 2009 for the first time since December 2002. 

In February/March 2010, the category reported a dramatic acceleration in year-over-year results versus January 2010. 

* Motor Vehicles & Parts Dealers delivered much stronger results on a 2-year basis in March 2010 as it broke-out of its previous -19% to -20% 2-year run rate range. 

* Electronics & Appliance Stores delivered its first positive year-over-year result in March 2010 since July 2008.  While the category’s results were negative versus LY in Q1 2010, the category will anniversary a massive degradation in Q2 2010 (i.e. -12.6% in Q2 2009 versus -5.5% in Q1 2009).  

* Non-Store Retailers have been the ‘story’ for calendar 2010 thus far.  2-year run rates materially improved in each of December 2009, January 2010, and February 2010.  The category faces much easier year-over-year comparisons in Q2 2010 (Apr – Jun) than Q1 2010 (Jan – Mar).               

* Below, we show year-over-year results in Q1 2009 (Jan-Mar), Q2 2009 (Apr-Jun), Q3 2009 (Jul-Sep), Q4 2009 (Oct – Dec), and Q1 2010 (Jan – Mar).   

Most categories improved in Q1 2010 relative to Q4 2009 (excluding Sporting Goods and Health & Personal Care).