Cautious US consumers weigh on January retail sales
Post-holiday discounts helped many US retailers lift their sales in January, according to monthly figures released yesterday (2 February), but overall results were mixed as many consumers shopped cautiously amid the struggling economy.
For apparel retailers there was the added challenge of warm weather curbing sales of winter coats, boots and other winter basics, as well as tougher year-ago comparisons.
That said, retail same-store sales stepped up to a 4.9% gain in January, largely on the back of improved results from retailers such as Target, the second-largest US discount retailer, according to Kantar Retail. This was better than the 3.6% same-store sales gain last month and the 4.2% gain in January 2011.
"Whether January's growth can be sustained may depend on whether shoppers' spending intentions show more signs of stalling out in the months ahead," said senior economist Frank Badillo.
"That underlying trend appears to be overwhelmed at the moment by the mixed retail and economic reports."
For many retailers January is the quietest month of the year as shoppers tighten their belts after Christmas and stores try to clear unsold inventories.
Regional department store operator Stage Stores saw its same-store sales fall 0.1%, and said its gross margin was "negatively impacted by the promotional business environment."
While Bon-Ton Stores, where same-store sales fell 3.5%, weaker than expected January sales were blamed on the "continuation of the milder weather in our markets, which had an adverse impact on sales of cold-weather merchandise and comprised the majority of our sales shortfall."
Disappointing results were also seen at department-store chain Dillard's, where revenue at stores open at least a year were flat with last year. Sales also dropped 13% at teen clothier Wet Seal, while Gap Inc blamed its 4% fall in comps on a "clearance-based" January.
Other chains like Macy's saw a 2.4% increase but missed analyst estimates.
Winners included Victoria's Secret parent Limited Brands where same-store sales were up 9%; and an even higher 10.5% gain at Saks Inc where women's contemporary and "gold range" designer apparel and men's clothing and contemporary apparel sold particularly well.
Target, meanwhile, topped expectations with a 4.3% rise in same- store sales, with its strongest performers including shoes, and boys' and girls' clothing.
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