October 15, 2008, 12:00 AM

Retail sales take a dive in September

Retail sales excluding autos and food service fell 1.4% in September from September 2007 and 1.2 % from August, the U.S. Commerce Department reports. Non-store sales were up 3.1% year-over-year, but down 0.8% from August.

Retail sales excluding autos and food service fell 1.4% in September from September 2007 and 1.2 % from August, the U.S. Commerce Department reports. Including food service and autos, sales fell 1% from a year ago and 1.2% from August.

The Commerce Department does not report e-commerce sales on a monthly basis, but it does report that non-store sales were up 3.1% year-over-year, but down 0.8% from August.

Also, today, ShopperTrak RCT Corp.’s Retail Traffic Index reported that total U.S. foot traffic in retail stores for September fell 9.3% from a year ago, while the company’s National Retail Sales Estimate reported retail sales fell 1% in September. It is the first year-over-year sales decline in ShopperTrak’s estimate since March 2003.

Sales numbers from the National Retail Federation, the trade group for merchants, were slightly more hopeful, though not by much. The NRF’s data shows retail sales for September, excluding automobiles, gas stations and restaurants, decreased 0.7% seasonally adjusted from August while increasing 1.4% unadjusted year-over-year.

The decline in total sales as reported by the Commerce Department was driven by a 20.2% drop in vehicle sales and a 10.7% drop in home furnishings sales. Not surprisingly, gasoline sales were up 17.8%, driven by near-record high prices for gasoline. Grocery store sales were up 5.2%.

September sales totaled $375.5 billion. For the third quarter, the Commerce Department reports that sales were up 0.8% from a year ago.

The NRF reports that sales at furniture and home furnishing stores decreased 9.2% year-over-year while electronics and appliance stores declined 2.1%. Sales at apparel retailers declined 2% year-over-year.

“With economic concerns weighing down consumers, retailers are facing incredible challenges heading into the fourth quarter,” says NRF chief economist Rosalind Wells. “Retailers are cutting operating costs by whittling back inventory levels and trimming labor costs, but it is nearly impossible for companies to fully counteract a complete pullback in consumer spending.”

The Commerce Department bases its monthly reports on a sample of 5,000 retail and food service companies. It says the results are weighted to represent the universe of 3 million retail and food establishments in the U.S. The department says the 5,000 respondents represent 65% of sales in the estimate.

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