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March Retail Sales Inch Up

March Retail Sales Inch Up
Doug
  • On April 25, 2011

NordstromSoaring gas prices and the lack of an Easter shopping season put a damper on U.S. retail sales in March.

Sales increased just 0.4 percent in March compared to a 1.1 percent gain the previous month, according to U.S. Commerce Department data. With sales of gas excluded, retail sales jumped just 0.1 percent.

“The wallets are still open but not nearly as wide as they have been,” said Joel Naroff, president of Naroff Economic Advisor.

Analysts pointed to rising gas prices as the main culprit. The American Automobile Association said the average price-per-gallon in March was $3.77, up 22 cents from February. “Consumers can’t absorb the spike in energy prices without cutting back in other areas,” said Steven Ricchiuto, chief economist for Mizuho Securities.

Analysts say sales could improve in April with the help of the Easter holiday and a break on escalating gas prices, which have been rising steadily for six months but are expected to steady or even fall as world surpluses begin to grow as consumers cut back on consumption.

If gasoline prices can stabilize over the next few months, consumer spending may continue to grow,” said Jack Kleinhenz, chief economist for the National Retail Federation (NRF). “But it remains to be seen what consumers will cut out of their budgets because of the cost of filling up their tank.”

The NRF said home improvement retailers did better than most retail channels during the month, with a 2.2 percent increase in sales led by strong sales of garden equipment and building supplies. Home electronics retailers weren’t far behind with a 2.1 percent increase.

The International Council of Shopping Centers (ICSC) reported March sales at chain stores in the U.S. were slightly better, jumping 2 percent. The ICSC cited high gas prices for the meager gains but also noted that Easter falls in late April this year (April 24) as opposed to April 4 in 2010, which all but eliminated Easter shopping in March.

Gap Apparel retailers reported sales increases in the mid-to-high single digits for March, including Nordstrom Inc., which said same-store sales jumped 5.1 percent in March. Specialty retailer Buckle Inc. said same-store sales increased 8.4 percent for the month while Gap reported an 8 percent jump in sales.

Discount apparel retailers didn’t fare as well. Both Ross Stores and TJX reported a 1 percent decline in sales. Overall, MasterCard Spending Pulse reported a 4.4 percent increase in apparel sales for the month.

But overall, analysts said the numbers were disappointing given the more substantial increases in previous months. “We didn’t seen an acceleration of momentum from February to March,” said Michael McNamara, vice president of research for MasterCard Spending Pulse.

One bright spot was e-commerce. Spending Pulse estimates that online sales jumped 16 percent in March, an increase it attributed in part to high gas prices keeping consumers at home and online.

References:

U.S. Retail Sales Rise 0.4% in March

March Retail Sales Indicate a Confident but Cautious Consumer

March Retail Sales Solid

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