I found these two articles from Market Watch very telling with regard retail sales over the next six months. As maintained in previous posts retail sales are expected to weaken over the next 6 to 9 months.
First, does Wall Street know something the rest of us don’t know concerning retailers, From Market Watch:
Retail stocks across the board were slammed in the final houring of trading Friday, following a late-day market meltdown that has marked trading most of this week. The S&P Retail Index ($RLX ), the sector's key yardstick, ended the session down 4% to 468.44, its worse closing point in 10 months. On the week, the index is lower by 3.2%, more than half of which happened in the session's last hour.
Also based on the graph from Yahoo it appears that the $RLX has lost almost 10% of its value in the last two weeks. (Double click to graph to enlarge.)
Second, it looks like the next busiest time of the year after Christmas is the back-to-school period and according to Market Watch things are looking so-so from a retailers standpoint.
Many retailers are bracing for what could be one of the toughest back-to-school selling seasons in recent years as consumers deal with credit worries, higher gas prices and a sell-off in the stock market.
With nearly one-quarter of the country's population in school, the three-month period when students of all ages stock up on notebooks, electronics and new clothes is considered the second-most important shopping period for retailers, ranking only behind Christmas.
Typically, parents consider back-to-school as a "must-spend" event, but this year many will be tightening their purse strings.
ARG's national survey of parents' spending plans found that 48.7% plan to keep back-to-school expenses to a minimum. Of those, an overwhelming 90.3% said this is because they have "less money," Beemer said.
Forecasts on spending vary wildly. The National Retail Federation projected that all back-to-school spending would tally $18.4 billion, up 6.9% over last year. But the International Council of Shopping Centers is expecting sales to climb 5% to $27 billion. Beemer doesn't have a total spending estimate in his forecast, but said that spending will only rise 2.5% over last year. (To get real spending subtract about 2 - 2.5% for inflation for the last year)
But that could all change this month when the majority of back-to-school shoppers hit the malls and shopping centers. According to a survey conducted by ICSC and Citi Investment Research, 52% of consumers say they'll do most of their back-to-school shopping in August. The rest of their spending is split between July and September, with a slightly heavier proportion in September.
Looks like we will know the answer in October.