Redbook YoY

Redbook YoY is the year-over-year reading of the Johnson Redbook Index, a weekly private index of US retail sales. Publisher Redbook Research Inc., in business since 1964, issues it through the Johnson Redbook Service. It uses direct estimates by large US broadline retailers, covering about 9,000 stores.

Its input is same-store sales, or sales at stores open for 12 months or longer, shown in percent against the same week one year earlier. By dollar value it covers over 80% of the matching official retail series of the US Department of Commerce. But it is only an early signal excluding cars and gasoline, not total sales. Consumer spending is two-thirds of the economy, so markets watch this timely weekly signal closely.

Each observation covers one retail week, Sunday through Saturday, ending the Saturday before release. Release is at 8:55 a.m. Eastern Time each Tuesday. Premium subscribers get a 4-page report and call at 8:40 a.m., 20 minutes before the public release. Each release shows week-to-week, month-to-date cumulative, and year-over-year change, with the year-over-year figure watched most closely, plus department and discount subgroup detail.

If a US public holiday disrupts the Tuesday slot, release moves, usually to Wednesday. Each weekly year-over-year reading stands as released, while the cumulative month-to-date figure updates mechanically with each new week in the retail month.

The headline moves with two sales-weighted subgroups that reflect different slices of general merchandise demand.

• Department stores: same-store growth at mid- and high-end mall-based chains, reflecting demand for higher-end general merchandise.
• Discount stores: same-store growth at value chains, reflecting demand for bargains and staples.

The reading for the week ended Saturday, September 6, 2008 was +1.8% year on year, down from +2.3% the prior week. It was released Tuesday, September 9, 2008 at 8:55 a.m. Eastern Time.

Discounters posted strong back-to-school sales while department stores lagged, showing bargain-conscious shoppers, and Gulf Coast sales suffered from Hurricane Gustav. The note added that this early-September weekly reading would have no bearing on expectations for the official August 2008 monthly retail report.

1. Collect: Redbook gathers weekly performance estimates from sampled large US general merchandise retailers.
2. Per-retailer growth: For each retailer, compute same-store year-over-year growth using only stores open 12 months or longer. In words, compare this Sunday-to-Saturday week with the same week one year earlier.
3. Weight and aggregate: Combine retailer growth rates as a sales-weighted average of dollar sales, with no equal weighting and no fixed weights. For example, sales of $110 million versus $100 million a year earlier mean +10% growth, while $48 million versus $50 million mean -4%. With dollar-sales weights of about 0.696 and 0.304, the index is about +5.7% despite the negative department subgroup.
4. Calendar convention: Use retail weeks from Sunday through Saturday, compared with the same week one year earlier, with weeks weighted equally inside the month.
5. Seasonal adjustment: There is none. Year-over-year comparison itself controls for season, so do not call the series seasonally adjusted.