Blog: Has spring sprung for US retailers?
Leonie Barrie | 9 March 2009
Milder weather, new spring merchandise and tight control over inventories helped many US retailers to better-than-expected sales in February. But even so, industry observers are warning this is unlikely to mark the beginning of a recovery.
Leading the charge, Wal-Mart Stores again put in a market-beating performance, after lower gas prices meant some households had more disposable income to spend. Sales at stores open at least one year were up 5.1%, it said.
But higher sales at Wal-Mart are seen as confirmation that cash-strapped shoppers continue to trade down in their search for bargains. And they’re spending their money on products like groceries and healthcare rather than on clothes.
As if to confirm this, apparel retailers and department stores saw some the steepest sales declines, but in many cases sales were down less than analysts had expected. Gap Inc, American Eagle Outfitters, Limited, Wet Seal, Stage Stores, Target Corp and TJX were just a few that bucked expectations.
However department stores such as Macy's, Saks Inc, Neiman Marcus and Nordstrom Inc are still struggling to attract shoppers.
Of course there were some signs that spring has sprung, with Hot Topic posting a 10.8% increase in same-store sales and teen retailer The Buckle seeing its same-store sales climb 21% from a year earlier.
But by and large, the results simply beat dismal expectations and will be hard to maintain for the first half of the year. Although it’s also worth remembering that now we’re a year into the economic slowdown, same-store sales for the months ahead are going to be against weakening year-ago numbers so may simply look better by comparison.
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