Modest September Sales Gains Reflect Conservative Consumer, According to NRF

Washington, October 12, 2007 – Though September sales gains were moderate,
they were better than expected, giving retailers a welcome surprise as they
head into the ever-important holiday season. According to the National
Retail Federation, retail industry sales for September (which exclude
automobiles, gas stations, and restaurants) rose 2.2 percent unadjusted over
last year and 0.2 percent seasonally adjusted from August.

September retail sales released today by the U.S. Commerce Department show
total retail sales (which include non-general merchandise categories such as
autos, gasoline stations and restaurants) increased 0.6 percent seasonally
adjusted from last month and 2.9 percent unadjusted year-over-year.

“Consumer spending continues to be restrained in most areas,” said NRF Chief
Economist Rosalind Wells. “Although sales across the board show modest
increases, consumers are certainly spending more cautiously.”

While some categories fared well, unusually warm weather didn’t help
clothing and clothing accessories retailers whose sales increased a meager
0.3 percent unadjusted year-over-year and decreased 0.4 percent seasonally
adjusted from August.

Consumer demand for popular electronics such as cell phones and MP3 players
helped boost electronics and appliance stores sales 0.9 percent seasonally
adjusted from August and 3.4 percent unadjusted year-over-year. Health and
personal care stores also showed strength with seasonally adjusted sales
from last month increasing 1.0 percent and 4.1 percent unadjusted
year-over-year.

Housing market concerns affected both building material and garden equipment
and furniture and home furnishings retailers. Sales in home furnishings
stores dropped 0.6 percent seasonally adjusted from August and 3.6 percent
unadjusted over last year. Building materials stores sales increased 0.1
percent seasonally adjusted month-to-month and decreased 2.3 percent
unadjusted year-over-year.

The National Retail Federation is the world’s largest retail trade
association, with membership that comprises all retail formats and channels
of distribution including department, specialty, discount, catalog,
Internet, independent stores, chain restaurants, drug stores and grocery
stores as well as the industry’s key trading partners of retail goods and
services. NRF represents an industry with more than 1.6 million U.S. retail
establishments, more than 24 million employees – about one in five American
workers – and 2006 sales of $4.7 trillion. As the industry umbrella group,
NRF also represents more than 100 state, national and international retail
associations. www.nrf.com.