Retail Sales Bounce Upward
- Mar 05, 2010
March 5, 2010
By Dees Stribling, Contributing Editor
What snowpocalypse? The American consumer shrugged off the snows of February and went shopping in considerable numbers last month according to a number of retail surveys. Thomson Reuters reported a 4 percent same-store sales increase for U.S. retailers this February compared with the same month in 2009. The International Council of Shopping Centers likewise reported a positive bump in consumer spending, with a 3.7 percent gain year-over-year.
Of course, February 2009 was a time when a lot of consumers were too worried about the future to do much more shopping than strictly necessary. Still, the upward spike is considered a harbinger of a healthier economy–especially if it continues into March.
“The biggest emerging change is that shoppers do appear somewhat eager to stop limiting their purchases in various ways, such as by buying only what they truly need, buying fewer things, shopping less often, postponing purchases, and so on,” Frank Badillo, a senior economist at the consultancy Retail Forward, a Kantar Retail company, told CPE.
“At the same time, shoppers haven’t moved sharply away from many of the deal-seeking and trading down behaviors they learned during the recession,” he continued. “So shoppers are inclined to do more shopping and buying, but when they get to the stores they are still likely to want to find a good deal or choose a lower-priced product or brand.”
Retail Forward released its own survey of the 30 largest U.S. retail chains (except Wal-Mart) in February, and it too was very positive–a 3.9 percent same-store sales increase. Apparel and accessory stores did the best, followed by department stores. Lagging slightly behind them were food and drug retailers.
On the Other Hand…
Consumers might be in the stores buying, but it isn’t clear that the housing market is on a straight line to recovery. According to the National Association of Realtors, its pending home sales index, a forward-looking indicator of the housing market, fell a seasonally adjusted 7.6 percent during January, a step back from a revised 0.8 percent gain in December.
How come? NAR chief economist Lawrence Yun suggested in a statement that snowpocalypse had something to do with it. “The abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February…”
Maybe. Yet pending sales were down more in the West (13.2 percent) than the snowy Northeast (8.7 percent). Even so, on an annual basis, pending home sales in January were still up some 8.8 percent compared with the same month in 2009.
Wall Street managed to have a small up day on Thursday, with the Dow Jones Industrial Average edging up 47.38 points, or 0.46 percent. The S&P 500 gained 0.37 percent and the Nasdaq was up 0.51 percent.