An early Easter shaved a day off consumers spending at their normal clip. Toss in a few blizzards and retail sales growth was anemic at best. Many analysts were quick to point out that the numbers could have been far worse without the rising stock market, home prices rebounding and the drop in gas prices. Same store sales growth was a muted 1.5% in March, a far cry from the 3.9% reported in December.
The number was in line with expectations but that low of a number could even paint too rosy of a picture. Many retail giants only report quarterly statistics so the numbers could be getting skewed. The Commerce Dept is set to release retail statistics tomorrow which should shed more light on consumer spending trends.
Beleaguered retail giants such as JCPenney and Gap are in the midst of their earnings season and JCP has already ousted their CEO in favor of the old CEO that oversaw the rapid downfall of the company. Not exactly a vote of confidence in the retail sector. Gap is also expected to see headwinds as concerns grow of hiring pace and the overall effect of the sequestration.
More niche related brands such as those under the umbrella of Limited Brands Inc are seeing sales pick up by %. They are expecting similar increases across Bath and Body Works and Victoria’s Secret on April. An analysts at RBC Capital Markets said that new and updated products should continue to push sales growth within the niche categories.
As for an overall picture, weather improvements as we get deeper into Spring should remove the unknown and put the focus squarely back on macro and micro economic trends across the United States. Retailers will get to see the full impact of the sequestration and the payroll tax hike in their numbers. Investors will get some semblance of direction if and when Capitol Hill decides to actually do something other than go on cable news shows and spout talking points.
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