From Linc Wonham, Website Magazine:
June Swoon Has Some Merchants Heading Back to School Early

June turned out to be a sobering month for anyone hoping for more signs of an economic recovery, and online retailers are definitely among the underwhelmed. Probably the only bright spot to the International Council of Shopping Centers’ index of retail sales was that the numbers were still considerably better than a year ago.

But the upward trend in consumer spending we’d been seeing the past few months all but halted as retail sales gained a meager 3 percent, despite the inclusion of the Memorial Day weekend in the month’s overall data [emphasis mine, Ed.]. The index reported a decline of more than 5 percent in June 2009, but merchants who were expecting June 2010 to kick off a strong summer shopping season are now left wondering if this year’s earlier consumer spending will wind up costing them down the road.

I can testify that June was not as busy for my area of the country as it was last year, and much weaker than we had anticipated and budgeted for (that is another discussion altogether). As we are located in a fairly remote, semi-rural area – the summer economy is based on tourism – unemployment is a problem. Most of the restaurants and hotels are not seeing the level of business that they would like and are holding off on hiring any additional seasonal workers.

Wonham goes on to discuss unemployment and consumer confidence as factors:

For whatever reason, most likely an unemployment rate that is still uncomfortably high, consumers have lost the confidence they exhibited into about mid-April. The retail numbers for July and August will have an enormous bearing on the economy’s overall health as merchants are still holding out hopes for an aggressive back-to-school season. Normally slated to kick off at the end of this month, many retailers will try to offset the slow June with an early jump on the back-to-school offerings.

I remain skeptical that an early “back-to-school” sale push will do much good for retailers, as the rising unemployment and falling consumer confidence trends tend to be mutually reinforcing. I have a suspicion that many businesses are waiting, holding on to any cash that they have, to see what happens between the beginning of November and mid-January 2011.

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