By Mark Pender

NEW YORK (MNI) – MNI’s U.S. retail trade index dipped 2.1 points to
52.0 in the May 15 period reflecting the sector’s mild year-on-year
growth and pointing to no significant month-on-month change, according
to Market News International’s weekly survey released Monday.

Trends in the sample are pointing to an adjusted $366.4 billion
total for May sales, which would make for no change compared to April.

Total sales fell three-tenths from the prior period to a
year-on-year +3.4% for one of the lowest readings so far this year. In
an offset, same-store sales rose two-tenths to a mild but respectable
+1.9%.

Income is softening, at +17% with distribution narrowing slightly
for a third week in a row, now at 56% reporting significant gains
against 30% reporting significant declines. Sample size for the period
is 225 chains consisting of 171,700 retail locations.

May is an uphill battle for the sample given tough seasonal
adjustments, the toughest so far this year and likely, with the
exception of course of December, to prove the toughest of the year.

Building materials, which proved exceptionally strong in April,
will have to contend with an exceptionally tough adjustment this month
— by far the toughest of any component.

For the most part, commentary is upbeat though there are warnings
about softness in consumer sentiment, troubles in Europe, and the
breakdown of the stock market.

But judging by the surge of strength in discretionary categories,
these concerns are periphery. One comment to note comes from online
retailer Bluefly (BFLY) which reports a tangible rebound in the luxury
market including an increase in average order size.

This a very busy week for company news led this morning by strong
sales gains at home-improvement chain Lowe’s (1,721 stores – LOW). More
than 60 chains are set to issue statements this week including Lowe’s
rival Home Depot (HD) and Wal-Mart (WMT) Tuesday, Target (TGT)
Wednesday, Sears (SHLD) Thursday, and Ann Taylor (ANN) Friday.

Editor’s Note: MNI compiles its retail trade index based on a
weekly sample of company news and data.

** Market News International New York Newsroom: 212-669-6430 **

[TOPICS: MDURE$,MT$$$$,M$U$$$,M$UEQ$,MAUDS$]