February Snowfalls Probably Didn't Slow Shoppers

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Retailers are expected to post modestly encouraging sales tomorrow, when most major store chains post their February totals.

Despite uncooperative weather in the Eastern and Southern U.S. during February, sales totals are expected to get a boost from new merchandise arriving to replenish depleted post-holiday inventories.

An analysis by Thomson Reuters estimates retailers will show a 2.9% sales increase for February, led by a healthy 4.8% gain among discounters. Department store sales are expected to rise a modest 1.3%, a modest but healthy improvement, given that sales were down 9% the same time last year. And while teen-apparel retailers will likely be down 2.3%, the apparel segment as a whole could rise 4.7%, thanks to continued strength at TJX Cos. (TJX), the parent of discounters Marshalls and TJ Maxx, which have been posting double-digit sales growth through the recession.

Some apparel chains and department stores had said they would stock up on specially ordered merchandise to refill shelves after the holidays, anticipating that drawdowns of tight holiday inventories would leave them bare.

Luxury Recovering, Online Keeps Clicking Ahead

MasterCard Advisors' SpendingPulse survey, however, showed a different view of apparel sales: It reports that the market segment got hit by bad weather and dropped 1.8% in February below the year-ago period. Falling sales of women's apparel were the main reason for the drop: They were down 1.6%, while sales of men's clothes were up 5.7% and shoe sales rose 2.2%.

On the plus side, prices are holding up, thanks to the inventory restraint stores showed this past holiday season, after the markdown beating they took during the 2008 season. Retailers look as if they were able to attract shoppers in February without extreme discounting, noted Michael McNamara, vice president of research and analysis for SpendingPulse, in a statement.

Other retail sectors were up, thanks in part to having been down so far a year ago. Luxury retailers' sales rose 15.2% year-over-year, and consumer electronics sales -- which are also being affected by falling prices for flat-screen TVs -- were up 5.8%.

The biggest increase, however, came from online sales, which were up for the seventh straight month, rising 16.7% in February. Consumers keep moving their shopping online, said McNamara, noting the average price of an online transaction dropped 3.7% compared to last year, probably due to shoppers making more of their small purchases on the Web.

Unusual Conditions Make It Harder to Read the Tea Leaves

The bad weather has made February tough to read for analysts looking for clues about how shoppers will behave in the longer term.

"The impacts from nature and the light volume of February sales make it difficult to read too much into this month's performance," says Michael Niemira, chief economist of the International Council of Shopping Centers. Still, he held to his 2% higher forecast for February.

March isn't going to be much easier to read, either. Easter -- the next big shopping event of the year, and a big one for apparel -- comes early this year, moving from April to March. While reporting results today, both Costco Wholesale (COST) and BJ's Warehouse Clubs (BJ) estimated the shift will inflate March totals by as much as two percentage points.
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