Don’t you just LOVE economic reporting? Only in economics can you IGNORE the truth and point to data that is driven by an entirely different reason…playing YOU for the CHUMP!
So it is with the latest round of Retail sales…
What do you think is behind this?
Could it be a whole boatload of CLOSED STORES driving sales at ‘surviving’ outlets?
Nobody is getting a raise and contrary to heavily doctored ‘government statistics’, prices are still rising! So the consumer not only has less money to spend but they also have fewer places to spend it…which produces what, good citizen?
Let us proceed with tonight’s offering , which redefines the term ‘Happy Talk’.
Despite Storms, Stores Beat Expectations With Relatively Strong Gains
By STEPHANIE ROSENBLOOM
Published: March 4, 2010
Despite fears that snowstorms in February would dampen sales, the nation’s stores posted their strongest results on Thursday since late 2007, suggesting the beginnings of a broad recovery in retailing. [Um, it is more likely statements such as this one tell us that the reporter is a clueless twit!]
Nearly every major chain turned in robust figures, beating analysts’ expectations and recording the sixth consecutive monthly sales increase. Even long-struggling stores and sectors came back from the dead.
“If anybody was wondering about the real state of the consumer, this is their answer,” said John D. Morris, a retailing analyst with BMO Capital Markets. “The consumer is coming back.”
The results provoked a measure of skepticism, however. A major reason they looked so good was that they were being compared with the deep declines of February 2009. That tempered industry professionals’ enthusiasm, as did the continuing high rate of unemployment, which strongly correlates with consumer spending.
Moody’s Investors Service said in a research note on Thursday that while retailers reported “modestly positive results, we remain unconvinced that this is evidence of a sustainable trend.”
Analysts at Moody’s said that in the year ahead, many consumers would be forced to increase their savings to pay off debt, and that the weak credit market would continue to squeeze consumers. [This is true…so why would ‘sales’ increase? The answer is, they aren’t!]
With February always a slow sales month, retailing analysts said the major test of the nascent recovery in retailing would come at the end of April. Over the next two months, they will be looking to see whether consumers are willing to open their wallets for spring clothes and Easter-related treats and decorations.
But for now, the February results are the best news in retailing in many months.
Comparing this February to last, the industry reported a 4 percent increase in sales at stores open at least a year, according to Thomson Reuters. Analysts polled by the company had expected stores to do well, in contrast to last year’s 4.7 percent decline. Even so, the results exceeded their expectations by more than 1 percent. [You can bet more than one percent of retail space has been…eliminated.]
The International Council of Shopping Centers, a trade group, published its own figure, saying the industry had a 3.7 percent increase — the strongest since November 2007, when sales grew 4.9 percent by that group’s measure.
Had the weather been better, the results would probably have been even more robust. Retailers have a tendency to blame snow and rain for lackluster sales. But Michael McNamara, vice president for research and analysis at SpendingPulse, an information service of MasterCard Advisors, said this time the retailers’ lament was justified. He pointed out that sales in the Northeast and Middle Atlantic states — hit by repeated storms — account for about 25 percent of all retailing in the United States. [Um, could this be due to the ‘Wall Street/Washington corridor’?]
Macy’s, for instance, reported a 3.7 percent increase at stores open at least a year but said that its February increase would have been about 5 percent if not for the storms. [Bizarrely, the storms are probably the primary reason behind the ‘spike’ in sales, news of an impending storm can clean out a store in the hours before it strikes…]
The retailing industry’s 4 percent increase in February was the best monthly percentage jump that the chains had collectively posted since the end of 2007. But that does not mean the stores have returned to the sales levels they hit at the peak of the boom. Sales fell so far in the recession that stores have climbed only part of the way back. [A little ‘honest’ mis-direction here! Which is to admit that this few percentage points over last year’s abysmal numbers are still WAY below what they were during the ‘so-called Boom’.]
Still, the improvement last month was not only pervasive, it included categories of merchandise that had been hurt most by the downturn.
For example, sales of luxury goods not including jewelry peaked in 2007, and while they have yet to climb back to that level, they rose by double digits last month. Sales of luxury goods increased 15.2 percent year-over-year, according to SpendingPulse. “You’re just growing off of an absolutely tiny sales base last year,” Mr. McNamara said.
The February results continue a positive trend for the sector. Sales were up 8.1 percent in January and 5.5 percent in December, compared with the same months the previous year.
February sales at Saks stores open at least a year, a measure of retail health known as same-store sales, increased 2 percent. Same-store sales in the specialty retail segment of Neiman Marcus, which includes Neiman Marcus and Bergdorf Goodman stores, increased 5.1 percent. At Nordstrom, which offers a wider range of prices than Saks and Neiman Marcus, sales rose 10.3 percent.
As expected, stores that sell brand names at a discount thrived. Analysts said that while luxury retailing was enjoying an uptick, value was still king. Same-store sales rose 11 percent at Ross Stores and 10 percent at TJX Companies, which owns chains like TJ Maxx, Marshalls and Home Goods.
Other clothing purveyors showed improvement. Same-store sales climbed year-over-year at nearly every major department store chain, a long-struggling sector, including Macy’s and Kohl’s (both up 3.7 percent), Dillard’s (up 2 percent), J. C. Penney (up 1.2 percent) and Bon-Ton (up 0.5 percent). Stein-Mart was an exception, posting a 9.3 percent decline.
There were also increases at most specialty clothing stores and retailers that cater to teenagers, including Aeropostale (up 7 percent), American Eagle Outfitters (up 6 percent), Buckle (up 5.1 percent), Wet Seal (up 4.7 percent) and Gap (up 3 percent).
Abercrombie & Fitch, the worst-performing chain for much of the recession, reported a 5 percent same-store sales increase. [Weird they can say ‘same store’ without revealing how many outlets were closed…]
Same-store sales rose by double digits at Zumiez (up 11.2 percent) and Limited, which owns chains like Victoria’s Secret and Bath & Body Works (up 10 percent). Hot Topic was an exception, with sales sinking 7 percent. [Interesting, without knowing how many outlets were closed, we have no idea what the true scope of ‘improvement’ is! Did they have to close half of their stores to reap this miserable three to four percent spike?]
Yet even as some consumers bought discretionary items like shirts and sneakers, they continued to be frugal-minded, driving sales at stores that sell food and other necessities at low prices. [Yes, as I commented earlier, snow storms really drive sales at food retailers!]
Same-store sales were strong at discount chains like Costco (up 9 percent), BJ’s Wholesale Club (up 7.5 percent), and Target (up 2.4 percent). Wal-Mart, the nation’s largest retailer, does not report monthly sales. Costco said in a statement that customer traffic increased by about 3 percent and that the average transaction amount rose 1 percent. [Gee, does anyone really think prices remained ‘flat’ year over year? Not Friggin’ Likely!]
The International Council of Shopping Centers expects the industry to post a 2.5 percent same-store sales increase in March. Easter, which is a week earlier this year than last, will most likely help increase sales. So might tax refunds.
It’s a ‘head scratcher’ for sure, they point to many of the little ‘anomalies’ that could contribute to a spike in sales…and ignore the elephant in the room, how many stores have closed, driving the remaining business to other stores?
How much do you want to bet if that number were revealed, this tiny ‘spike’ would be far less impressive?
Um, if you need further proof that our society/civilization is ‘unraveling’ have a look at this piece!
Every once in a while I need to ‘vent’ too.
Thanks for letting me inside your head,
Gegner
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