US retail sales warmed by spring sunshine in March
A winning combination of warmer weather, an earlier Easter, new spring fashions and an improving economy helped a number of US apparel retailers to higher same-store sales for March, according to data released last week.
A "continuation of the strong pace" seen in February and in 2011 as a whole was how the International Council of Shopping Centers (ICSC) put it. Its tally of US chain store retailers saw a year-on-year gain of 4.1% in March same-store sales "with some acceleration in the apparel and department store segments given the early Easter and abnormally warm March weather."
Its 7.3% sales rise was "well above expectations," according to president and CEO Gregg Steinhafel, "reflecting a healthy underlying trend combined with the benefit of an earlier Easter and favourable weather this year."
"We're now planning for a revised first quarter comparable-store sales increase of 5% to 6%, reflecting a low to mid single-digit increase in our April comparable-store sales."
Likewise, an 8% sales gain at Gap Inc was helped by a strong reaction from shoppers to its colourful new spring merchandise. "We delivered solid sales performance in March and are pleased with customer response to product across all brands," said Glenn Murphy, chairman and CEO.
The San Francisco based retailer posted gains in its North American units of 9% at Gap, 5% at Banana Republic and 11% at Old Navy. International comparable sales were up 2%.
"The early warm weather drew attention to our outstanding assortments of fresh spring goods, which were received enthusiastically by customers," said Terry Lundgren, chairman, president and chief executive officer of Macy's Inc, whose March sales were up 7.3%.
The earlier timing of Easter - which this year fell two weeks earlier than last year - is also seen as a blessing for some retailers in March.
"Warmer weather and an earlier Easter combined to help improve our sales trend, especially in certain regions and businesses," noted Kevin Mansell, president and chief executive officer at department store operator Kohl's Corporation, where comparable store sales edged up 3.6%.
Easter spending is expected to rise 11% to $145.28 per person this year, according to the National Retail Federation. Total spending will be about $16.8bn, including $3bn in apparel purchases, its research said.
Even so, retailers remain cautious about sales prospects for April, with some Easter sales likely to have been pulled forward into March. A shift in the timing of Mother's Day to May this year from April last year, could also hurt April sales.
As Macy's Lundgren notes: "Sales in April are planned to be weaker than in March, given the calendar shift in which the pre-Easter period falls into March this year versus April last year. Moreover, April sales are expected to be disadvantaged by a Mother's Day that is later in May this year."
"Because of this shift, the best measure for performance is the combined sales for the two months [March and April]," explains John Cato, CEO of The Cato Corporation, which operates the Cato, Versona and It's Fashion stores. Its March sales increased 5%.
It also remains to be seen what the impact of rising fuel costs will have on this spending momentum in the coming months.
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