Early Easter, Warm Weather Put a Spring into March Retail Sales
The International Council of Shopping Centers reported better than expected sales during the last week of March, heading into the Easter holiday. For the week ending April 3, sales were up 2.1% from the week before and up 4.7% from the same time last year. Apparel, department and discount stores all benefited.
"The calendar shift due to the earlier Easter this year versus last year [April 4, 2010, vs. April 12, 2009] caused [March] sales to surge on an unadjusted basis, but even on a seasonally-adjusted basis, sales were quite strong as well," said Michael Niemira, the ICSC's chief economist. Warm weather around the country contributed to the improved sales figures, said Niemira's report, which noted that temperatures across the country were the warmest in 18 years for that time period.
The ICSC has revised its forecast for March sales to expect an increase of 8% to 10% above last year, crediting the Easter shift for about six percentage points of the boost. Only a week earlier, ICSC was projecting an increase of 3% to 3.5%, and expecting possibly more.
Retailers Expect Shoppers to Return, But They Won't Find Many Bargains
Even after factoring out the six-point surge due to the Easter effect, that still leaves March with a modest gain. Many observers have noted that consumers are cautiously increasing their spending since the winter holidays, and leading economic indicators are pointing up. But experts and consumers alike would be more confident if the unemployment figures were more optimistic.
Thompson Reuters estimates sales in March will come in 6.2% above their levels from a year ago, with discount stores showing the biggest gain at 8.3% and department stores up 8.1%. That compares to drops of 5.2% and 9.8%, respectively, at this time in 2009, so stores are still regaining ground lost during the recession.
But retailers continue to expect better sales to come, and are preparing for them. According to the National Retail Federation's monthly survey, retail container volume at the nation's biggest cargo ports is expected to be up 13% in March and 8% in April compared to 2009. Cargo traffic had been down through the recession as retailers reduced inventory to cut their losses, but cargo flow turned positive again at the beginning of the year.
Based on those figures, expect the selection at stores to improve this spring after a lean winter, but don't expect prices to be lower. As the recent retail earnings numbers showed, merchants have learned to wring every last cent of profit from newly frugal shoppers by controlling inventories tightly and holding back on markdowns.
Economists may be saying the recession is over, but that's not how it's playing at the mall.