Inside This Issue - News
Retail sales bounce back
March 29th, 2010
NEW YORK – Despite severe weather in several parts of the country in February, retail sales appeared to recover as consumers seemingly regained some confidence.
Kantar Retail (formerly Retail Forward) calculated a 3.9% weighted composite increase in same-store sales among the 30 retailers it tracks. That was a sequential increase from the 3.3% rise in January and a dramatic improvement over the 4.1% decline in February 2009. Including Walmart’s sales, though, year-ago sales edged up 0.4%.
“Shoppers remain deal-focused and inclined to trade down among products and brands, but they are clearly ready to shop more and make some of the purchases they avoided during the recession,” commented Frank Badillo, senior economist at Kantar Retail.
In a reversal of the typical pattern during the depths of the recession, the rebound was strongest among apparel and accessories retailers, who outpaced mass market outlets.
The National Retail Federation (NRF), which excludes automobiles, gas stations and restaurants from its calculation, found that retail sales rose 1.7%, year over year, in February.
According to the NRF, food and beverage store sales jumped 3.9% in February while increasing 1.3% over January. Sporting goods, hobby, book and music stores performed similarly with a 3.5% gain over February 2009. Electronics and appliance stores dipped slightly, year over year, but recorded a 3.7% increase over January.
“February could be the direct result of cabin fever, with consumers eager to get some fresh air and enjoy a day of shopping,” said Rosalind Wells, chief economist for the NRF. “We expect sales increases to continue but high unemployment and other economic factors will restrain consumers’ ability to splurge on discretionary items.”
Among mass market chains that report on a monthly basis, Target Corp. posted a 6% rise in overall sales to $4.64 billion, while comparable-store sales grew 2.4%.
“February comparable-store sales were modestly above our expectations,” said chairman, president and chief executive officer Gregg Steinhafel. “We continue to experience year-over-year increases in guest traffic in our stores, reflecting the relevance of our strategy and assortment in combination with a slowly recovering economic environment.”
Among membership warehouse clubs, Costco Wholesale Corp. posted a 5% increase in comparable-store sales for its domestic warehouses. However, the retailer got a major lift from gasoline price inflation, and excluding the impact of gasoline sales, comparable-store results gained 2%.
At BJ’s Wholesale Club Inc., comparable-club merchandise sales expanded 39% in February, while the inclusion of fuel sales pushed up the overall comparable-club increase to 7.5%. According to the company, club traffic excluding gas sales increased about 3% while the average transaction edged up about 1%.
Food sales rose approximately 7%, offsetting a 1% decline in general merchandise sales. Consequently, the strongest-performing departments and categories included bakery, breakfast food, dairy, deli, frozen food, juices, produce and snacks, along with cigarettes, computers, furniture and housewares.
Memphis-based Fred’s Inc., a regional discounter operating 669 stores in the Southeast, posted a 2% increase in comparable-store sales during the month.
“We are pleased to begin our new fiscal year by reporting stronger sales,” said chief executive officer Bruce Efird. “Our advertising circulars performed at the high end of plan by attracting customers to key and timely promoted items.”