by Doug Desjardins
Retailers getting ready to roll out spring seasonal sections are feeling more optimistic now than they did in 2009 as sales trends continue to point toward a long-awaited recovery.
The U.S. Commerce Department reported that retail sales for January inched up 0.5 percent to $355.8 billion, slightly better than the 0.3 percent increase that was forecast and an improvement over the 0.1 percent decline in December.
"This is decent news considering just how bad the labor market is," said Adam York, an analyst with Wells Fargo. "We had gains in most of the categories and the real strength was in general merchandise sales."
Sales at general-merchandise stores and mass merchants led the way with a 1.5 percent increase, followed by electronics stores with a 1.2 percent increase. Department store sales, which were hard-hit last year, jumped 0.2 percent to mark the largest increase since spring 2009.
The National Retail Federation (NRF) reported similar results with retail sales rising 0.5 percent for the month. "We continue to see the economy show subtle signs of improvement," said NRF chief economist Rosalind Wells. "While the recovery still has a long way to go, we remain encouraged by the latest retail sales figures."
The International Council of Shopping Centers (ICSC) reported even better results, with chain-store sales rising 1.4 percent in January, due in part to Super Bowl sales and consumers stocking up before snowstorms. "It's encouraging, but the caveat is that January and February are very low volume months," said Michael Niemira, chief economist for the ICSC. "But it does appear that the retail industry is being sustained - it's now multiple months of pretty solid results." The ICSC also reported a 1.8 percent increase in chain-store sales during the first week of February and is projecting a 2 percent increase for the month.
The Commerce Department reported even better results online, with e-commerce sales jumping 4.7 percent in January. "We saw a good game in online sales, but it's in line with what's been going on," said York. "February online sales retail sales will be interesting because we'll see if people were shopping from home while they were snowed in."
Most retailers are expecting February sales to be impacted by a series of snowstorms that paralyzed much of the East Coast and the Southeast during the first few weeks of February. During the holiday shopping season, online retailers saw a huge jump in sales the weekend before Christmas when a blizzard snowed in millions of would-be shoppers in the Northeast.
If nothing else, retailers are expecting March sales to be stronger than they were in March 2009, when sales fell 1.8 percent and established a trend that continued for much of the year. March sales will also be impacted by the timing of Easter, which will fall in April instead of March this year.
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