Warmer weather in May contributed to increased same-store sales and consumer spending. The Thomson Reuters Same Store Sales Index reported a 3.9% increase in May 2013 sales. Shorts, t-shirts, and swimwear sold well as people spent more time outdoors. Increased discounting by retailers like Gap and Zumiez helped attract more shoppers for Memorial Day sales. The apparel sector was expected to show a 3.7% increase in same-store sales, led by Gap Inc. at 4.1% growth. Meanwhile, the drugstore sector faced challenges from increasing generic drug sales and was expected to have the weakest same-store sales growth of 2.4%.

1. Warmer Weather Continues To Bring Increase To May Same­Store Sales
The warmer weather in May has contributed to increased sales, setting a good fiscal tone and encouraging
confidence for U.S. shoppers. The Thomson Reuters Same Store Sales Index forecast for May 2013 reports a 3.9%
increase in sales in stores. Excluding the drugstore sector, the SSS growth rate increased to 4.8%, above the 3.8%
result recorded May 2012. The Thomson Reuters SSS index actual for April 2013 was 2.2% SSS, and 4.3% Ex­drug.
Shorts, T­shirts and swimwear were among the hottest selling merchandise purchases for May as people look to
spend more time outdoors. The Post­Easter decline in consumer spending was constituted from the cold weather last
month. Global mall trends have been strong, once again showing positive year­over­year retail traffic trends.
Recently, more traffic at shopping malls also helped with the increase in merchandise purchases for Memorial Day
and summer.
Increased Discounting To Attract Shoppers
The discount sector has the highest SSS estimate for May, at 5.3%. A majority of US consumers still move toward a
simpler, less materialistic lifestyle. Within the sector, Costco has the highest estimate, at 5.5%. Costco is expected to
benefit from increased membership fee revenue. The other company in this sector is Fred’s, with an SSS estimate of
­0.8%, partly due to a shift towards generic drugs hurting pharmacy sales.
Increased discounting is rapidly evolving. Top retailers were out in full force for Memorial Day with there best sales.
Gap's "Red Bright and Blue" event gave shoppers up to 40 percent off. merchandise Retailer Zumiez, offered Buy
One, Get One ½ off promotions. L Brands (Bath & Body Works, Victoria’s Secret), delivered some of the best holiday
giveaways while apparel retail store, The Buckle offered $5 beach towels to consumers for using their credit card.
The Apparel Sector
The apparel sector is expected to show a slight increase in SSS growth, at 3.7%. This compares with 3.6% a year ago.
Within Apparel, Gap Inc. has the highest SSS estimate at 4.1%. Significant growth plans for international expansion
and online sales forecast to make up to 30 percent of its 2013 total revenues. Gap’s Old Navy Global division is
expected to drive SSS growth, with its 5.8% estimate. Stein Mart has the lowest estimate within the apparel sector at
2.0%.
The Drugstore Sector
Due to increasing health care costs in recent years, analysts expect prescription revenues to suffer from increased
market share of generic drugs. The Food and Drug Administration states, “All generic drugs approved by the FDA
have the same high quality, strength, purity and stability as brand­name drugs.” Many are favored by medical
professionals due to comparable cost savings and demand for lower priced generic drugs offers effective treatment
alternatives for consumers. Today, almost half of all prescriptions are filled with generic drugs.
The drugstore sector is expected to have the weakest SSS growth, at 2.4%. Rite Aid Corp and Walgreen Co have
both reported increase in sales of generic drugs, deriving majority of profits from the pharmacy. Last year, Walgreen
acquired Alliance Boots for $6.7 billion to extend its reach of pharmacies around the world. SSS rose 2.8% in May. As
the economy continues to stabilize, employment rates and home prices increase, the retail pharmaceutical industry
expects greater sales in 2013.
How far is consumer confidence expected to edge up? With sentiment now at a 6 year high, the retail industry
continues to improve amidst current economic conditions. Most recently, Thomson Reuters SSS Index posted a 5.0%
gain for April 2013, stronger than April 2012’s 0.8% result. Overall, outlook indicates the economy is resilient and
growing. Retailers have become stronger while also being optimistic towards consumer confidence over the next

2. several months.