March sales in all sectors exceed expected growth
NEW YORK – Shoppers are finally coming out of hibernation.
Better weather and an earlier Easter enticed Americans to shell out for spring clothes in March, the fourth straight month of gains for retail sales. Target, Macy’s, Gap and the parent of Victoria’s Secret all beat Wall Street expectations.
The improvement was broad, spanning discounters, mass merchants, specialty stores and luxury retailers. The gains offer strong evidence that people are feeling more confident in the economic recovery and are more willing to spend.
Retailers had several factors on their side. The earlier holiday combined with comparisons to notoriously weak sales in March 2009 had analysts expecting solid improvements. But it’s also clear that shoppers’ mindset is changing.
“There was a lot of talk about the frugality of the American consumer and that the recession taught people to save more,” said Sherif Mityas, a partner in the retail practice at management consultant A.T. Kearney. “But U.S. consumers have short-term memories.”
Target Corp., Saks Inc. and Nordstrom Inc. said spring clothes sold well, particularly shoes and women’s clothing. Overall, sales in stores open at least a year rose 9 percent in March, based on an index of 31 retailers compiled by the International Council of Shopping Centers.
The gains were partly driven by pent-up demand from shoppers tired of cutting back, said John Long, retail strategist at Kurt Salmon Associates.
“Moms are beginning to shop for themselves, after shopping in their closets the last two years,” he said.
Analysts study monthly sales reports because most economists agree a robust turnaround in consumer spending, which accounts for as much as 70 percent of economic activity, is essential for any long-term recovery.
“If you factor out the Easter shift, as well as easy comparisons, you’re still seeing significant improvement,” said Ken Perkins, president of RetailMetrics, a research firm.
It was the biggest yearly gain since March 1999, said ICSC chief economist Mike Niemira. He said Easter probably accounted for about half of the increase and added that figures from this month will provide a more complete picture of consumer spending.
The monthly index excludes Wal-Mart Stores Inc., which stopped reporting monthly sales last year.
Among individual retailers, top performers included Target Corp., where sales rose more than 10 percent at stores open at least a year, partly because clothing was selling well.
TJX Cos., which owns T.J. Maxx, Marshalls and other discount stores, said sales at stores open at least a year climbed 12 percent in March, leading the company to raise its earning expectations for the quarter and the year.
Department stores, which were particularly hard-hit during the recession, showed strong gains, with Macy’s and Kohl’s both reporting double-digit increases. And luxury stores showed strength as well. Nordstrom Inc. reported a 16.8 percent gain and Saks Inc. 12.7 percent, both beating analyst predictions.