Retails sales in the Chicago area rebounded slightly in the first half of 2010, thanks to an uptick in apparel sales and a government stimulus program that drove appliance purchases, according to a report to be released this week.
But, no one is celebrating yet. Consumer activity in the region, while better than the same time last year, still lags the first half of 2008 when the nation was in a recession.
“It gives us a sense that things are going to get better, but very slowly,” said John Melaniphy, a Chicago-based retail real estate consultant and publisher of the report. “While the first half of 2010 showed retail sales increases, they are very narrow compared to other recession recoveries.
First half retail sales in the six-county metropolitan area rose 2.1 percent, or $946 million, to $45.8 billion compared to the first half of 2009, according the Melaniphy & Associates report. Excluding sales of auto and gasoline, sales rose 0.45 percent, or $161 million, to $36.5 billion.
In a sign of how dramatically consumers pulled back during the recession, sales in the first half of 2008 totaled $50.6 billion, well above the current level. First half 2008 sales excluding autos and gasoline was $40.1 billion.
The snail’s pace of the rebound leads Melaniphy to forecast that Christmas sales in the fourth quarter will be tepid. He also predicts that retailers will continue to be cautious about opening new stores, focusing instead on improving profits at existing stores.
“Consumers are saving their money, and I think they’re going to be very stingy at Christmas,” said Melaniphy. “We haven’t had any real improvement in employment or housing.”
The furniture and appliance category posted the biggest gain at 11 percent, helped by sales of flat screen TV’s and household appliances. Illinois ran a federally sponsored cash-for-appliances program in April.
Apparel and accessories stores also did well, rising 6.7 percent. Other categories posting gains included department and big box stores (referred to as general merchandise) up 2.1 percent, as well as drinking and eating places up 2.6 percent. Automotive and filling stations rose 9.2 percent.
On the down side, sales at food stores declined 1.1 percent, home improvement and hardware dropped 2.6 percent, and drug stores and miscellaneous retail fell 3 percent.
Sales figures are calculated based on recently released sales tax data from the state Department of Revenue. Illinois is one of the few states that makes retail sales tax data public, allowing analysts to get an accurate picture of consumer spending.
Another highlight: The city of Chicago, which accounts for 22 percent of metropolitan area sales, saw its first half retail revenue rise 2.68 percent to $10.3 billion, as consumers spent more on eating out and clothing.
Of the six counties tracked, Kane experienced the biggest jump in sales at 5.7 percent. Will County rose 2.8 percent. DuPage gained 2.2 percent. Suburban Cook County, excluding Chicago, was up 1.4 percent. Lake increased 1.3 percent and McHenry rose up 0.6 percent.
