A late Easter boosted April sales, but analysts warned that high gas prices could dissuade spending in the near term.


Easter, April sales, Kantar Retail, Frank Badillo, Michael McNamara, MasterCard Advisors SpendingPulse, Walmart chief executive Mike Duke, Target Corp., Costco Wholesale Corp., Wall Street Strategies analyst Brian Sozzi, BJís Wholesale Club Inc., Walgreen Co., Kantar Retail survey








































































































































































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Inside This Issue - News

Shift of holiday gives April retail sales a lift

May 16th, 2011

NEW YORK – A late Easter boosted April sales, but analysts warned that high gas prices could dissuade spending in the near term.

"The impact of rising fuel prices will become more obvious in the months ahead," said Kantar Retail senior economist Frank Badillo, adding that just how obvious depends on how much job and income gains suffer under the weight of economic uncertainty.

Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse, said rising gas prices "can have a variety of repercussions for retail," including fewer shopping trips, especially on weekends, and a consequent boost in e-commerce.

Walmart chief executive Mike Duke noted that the discounter was already seeing shoppers responding to higher prices at the pump by curtailing discretionary spending. Company officials added consumers were consolidating shopping trips, while spending more during each outing.

Last month retailers reaped the benefit of Easter falling 20 days later than it did in 2010. Target Corp.’s same-store sales for April, for example, surged 13.1%. But the figure for March and April combined ­— eliminating the impact of the Easter calendar shift — rose only 2.1%. Last year the gain for the two months was 3%.

"April comparable-store sales were somewhat below our expectations, as guests continued to be very cautious in their spending leading up to Easter," commented chairman, president and chief executive officer Gregg Steinhafel.

"Target remains focused on delivering an outstanding shopping experience, providing unbeatable value on high-quality, well-designed items throughout our assortment," Steinhafel added. "This is more important than ever for our guests as they face increasing pressure on their household budgets due to higher energy costs and increasing prices of food, apparel and home merchandise."

At Costco Wholesale Corp., same-store sales in the United States, excluding gas inflation, advanced 6% in April, beating analysts’ forecast of 4.3%. The chain reported that inflation was affecting groceries as well, noting that food companies were passing on the increased cost of ingredients and shipping.

Fresh food prices at the warehouse club operator rose by mid-to-high single digits, the company noted.

Wall Street Strategies analyst Brian Sozzi wrote in a research note: "Costco had the type of April sales performance that captured the very essence of the news flow that dominated during the month: inflation, a weak dollar and a slightly more guarded U.S. consumer."

Same-store volume at BJ’s Wholesale Club Inc. climbed 8.5% in April, as shoppers purchased such staples as groceries. The figure was just short of analysts’ prediction of 8.6%. Excluding gasoline, the same-store sales gain was 4.1%.

BJ’s sales of consumables, particularly fresh food, advanced as customers turned to the warehouse club operator for cheaper groceries; the late Easter also lifted revenue.

But softer demand for such categories as clothing, cigarettes, diapers, paper, soda and sporting goods pushed down sales of general merchandise by 1%.

In the drug class of trade, Walgreen Co. reported that same-store sales for the month rose 3.4%, just shy of analysts’ expectation of 3.6%. Same-store front-end volume increased 6.5%, while comparable-store pharmacy sales edged up 1.8%.

As to expectations for the remainder of spring and summer, a Kantar Retail survey found that more than a third of shoppers plan to spend less this month than they did in May 2010.

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