March Retail Sales Start Off Stronger Than Expected
According to the weekly tally by the International Council of Shopping Centers, sales at U.S. chain stores rose 3.4% above the same time last year and 2.9% over the previous week. That's the best year-over-year weekly growth seen since the week of July 14, 2007 and the best week-over week gain since Dec. 22, 2001.
"To paraphrase the old saw, March sales started off like a lion as better weather got consumers motivated about spring-related merchandise," wrote Michael Niemira, ICSC's chief economist. In a research report, he noted that this was the driest start to March in 18 years.
Sales had been depressed mildly in February by record snows in the Eastern U.S., and retailers had been hoping for some pent-up consumer demand to shift to March, thanks to an early Easter this year and the arrivals of new merchandise to restock depleted shelves after the holidays.
Based on the month's strong start, Niemira said he's projecting March sales will be 2.5% to 3.5% higher than last year's.
Retailers Look to Maintain Holiday Momentum
The sales figures continue to show shoppers loosening their grip on their wallets. Last week's February tallies gave investors hope for retail stocks.
The better-then-expected sales reports coming in recently -- despite high unemployment and tight credit -- hint that the worst of the recession is over, according to a report this week by Zacks Investment Research. After the most recent round of retail earnings reports showed most merchants posting sharply improved results, Zacks singled out Macy's (M), Gap (GPS), Limited Brands (LTD) and Sears Holdings (SHLD) as investment opportunities.
But Zacks cautioned retailers are still under pressure to hold on to the holiday momentum, given that the unemployment rate remains near 10% and shoppers are still under budget pressure.
A clearer picture will come Friday, when the U.S. Commerce Department releases its February retail sales data, which includes major chain stores, as well as groceries, gas and auto sales and results for Wal-Mart Stores Inc. (WMT), the world's largest retailer, which does not report its monthly figures publicly.