Same-store sales should grow
By Dhanya Skariachan |
May 6, 2010, Thursday
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Print Edition
Print Edition
WARM weather and a desire to refresh wardrobes should have helped US retailers increase sales in April, showing consumers are willing to spend a little more in an improving economy.
Retail chains ranging from Target Corp to J.C. Penney Co to Abercrombie & Fitch will report sales at stores open at least a year - an industry gauge known as same-store sales - this week.
Analysts are expecting same-store sales to have risen 1.7 percent in April, compared with a drop of 2.7 percent last year, according to Thomson Reuters data.
That follows a record 9.1 percent rise in March, when consumers moved up spring purchases due to an early Easter holiday. Many industry experts are looking at the combined two-month results as a better gauge of consumer strength.
An April increase would also mark the eighth consecutive month of rising sales after a year's worth of declines as consumers warm up to spending on nonessential items again and retailers craft new strategies to entice shoppers.
"Consumers appear to be awakening. Many who spent 2009 postponing purchases are now emerging from their cocoons and spending," said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors in Rochester, New York.
Retail outlets are also waking up to the opportunities, striking a better chord with revamped fashions.
"There are reasons to reload your wardrobe," he said.
Analysts expect same-store sales in the March-to-April combined period to rise 5.4 percent, up from a 4 percent gain in February and a 3.3 percent rise in January.
"Retailing is contagious for the consumer. If they start to spend, they continue to spend. Nothing's really happened in April that has been so negative that the consumer is going to disappear," said NPD Group analyst Marshal Cohen.
But Cohen said April could be a mixed bag for individual retailers, with some enjoying a spillover effect from March, while others do not see shoppers returning after the early Easter.
Unlike April 2009, which was the wettest in four years, this April was relatively dry and warm, according to Evan Gold at Planalytics, which provides weather data for businesses.
He expects chains with stores in the eastern US to have benefited most.
Wedbush analyst Betty Chen said she expected slightly softer trends in late April as temperatures cooled.
Retail chains ranging from Target Corp to J.C. Penney Co to Abercrombie & Fitch will report sales at stores open at least a year - an industry gauge known as same-store sales - this week.
Analysts are expecting same-store sales to have risen 1.7 percent in April, compared with a drop of 2.7 percent last year, according to Thomson Reuters data.
That follows a record 9.1 percent rise in March, when consumers moved up spring purchases due to an early Easter holiday. Many industry experts are looking at the combined two-month results as a better gauge of consumer strength.
An April increase would also mark the eighth consecutive month of rising sales after a year's worth of declines as consumers warm up to spending on nonessential items again and retailers craft new strategies to entice shoppers.
"Consumers appear to be awakening. Many who spent 2009 postponing purchases are now emerging from their cocoons and spending," said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors in Rochester, New York.
Retail outlets are also waking up to the opportunities, striking a better chord with revamped fashions.
"There are reasons to reload your wardrobe," he said.
Analysts expect same-store sales in the March-to-April combined period to rise 5.4 percent, up from a 4 percent gain in February and a 3.3 percent rise in January.
"Retailing is contagious for the consumer. If they start to spend, they continue to spend. Nothing's really happened in April that has been so negative that the consumer is going to disappear," said NPD Group analyst Marshal Cohen.
But Cohen said April could be a mixed bag for individual retailers, with some enjoying a spillover effect from March, while others do not see shoppers returning after the early Easter.
Unlike April 2009, which was the wettest in four years, this April was relatively dry and warm, according to Evan Gold at Planalytics, which provides weather data for businesses.
He expects chains with stores in the eastern US to have benefited most.
Wedbush analyst Betty Chen said she expected slightly softer trends in late April as temperatures cooled.
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