Apparel Sales Decline in July

Chicago Sales of clothes and shoes fell in July as cash-strapped consumers cut back spending further to pay for nondiscretionary purchases such as food and gasoline, MasterCard Advisors said in a report on Wednesday.

Overall July apparel sales declined 0.8% from a year ago, with women's apparel sliding 3.3%, the eighth-straight month that sector fell, according to a report by SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide.

Sales of men's apparel rose 0.9%. Overall footwear sales fell 0.9%.

"This is one of the weaker months I've seen in the last five years," said Michael McNamara, VP of SpendingPulse, according to a Reuters report.

He said consumers are cutting back more on discretionary items since the U.S. government's tax-rebate checks mostly cycled through the economy before July began.

June's SpendingPulse results reported a 0.3% from the previous year, mainly helped by the Father's Day holiday and rebate checks.

According to McNamara, a slight increase in sales was reported at the end of July after 11 states held sales-tax holidays as the back-to-school shopping season kicked into gear. He said the late buying indicated shoppers were more aware of bargains amid a sluggish economy.

"We're continuing to see a divergence here in where the retail dollars are flowing," McNamara said. "They really seem to be flowing into the nondiscretionary areas like drugstores, food and gasoline, and it's really coming at the expense of some of these retailers such as apparel and electronics and appliances."

The results from SpendingPulse provide an early look into the strength of July same-store sales, which many retailers will report on Thursday.