The crucial back-to-school season got off to a slow start, as retailers hoping for brisk sales of apparel, backpacks and school supplies instead saw tepid business and continued consumer frugality last month.

Major chain stores reported that sales rose a modest 2.9 percent in July compared with a year earlier, according to Thomson Reuters' tally of 28 retailers. That was lower than the 3.1 percent increase analysts had predicted and marked the fourth straight month that results either missed or came in at the low end of expectations, said Michael Niemira, chief economist at the International Council of Shopping Centers.

In a poor sign for the back-to-school season, teen retailers were the biggest drag on the retail industry last month, with Hot Topic Inc. posting a 9 percent sales decline, Wet Seal Inc. reporting a 4.3 percent drop and American Eagle Outfitters Inc. seeing flat sales.

Even Aeropostale Inc., a relative bright spot in the weak teen sector in recent months thanks to lower prices than many of its competitors, struggled in July: The chain posted a 1 percent increase, worse than the 7.1 percent rise that analysts had expected.

p>All told, 61 percent of retailers missed expectations, according to Thomson Reuters.

Source: Chicago Tribune
http://articles.chicagotribune.com/2010-08-05/business/sc-biz-0806-retail-sales-20100805_1_action-sports-retailer-zumiez-effect-of-store-openings-teen-retailers