Shoppers Extend Their Spree Into March
Retail sales were very strong again in March, buoyed by an early Easter and continued overall economic strength that had consumers returning to stores, even after their shopping spree of the previous few months.
“It was stronger than expected--it sounds like a broken record,” said Michael Niemira, retail analyst for the Bank of Tokyo-Mitsubishi, which reported an overall same-store sales gain in its monthly index of 9.9%. Goldman Sachs & Co. pegged the increase at 8.7%.
But analysts cautioned that March’s gain could be April’s loss.
Merchants in March might have had higher gains as compared with March of last year because of an earlier Easter, which last year came later in April. That means that last year’s April figures were strong--and thus not likely to be outpaced by much this April, which doesn’t have the Easter buying incentive.
Niemira said he also anticipates some slowing in the booming housewares industry, based on a dip in household formation in late 1999. That’s because household-formation trends, either up or down, usually show up several months later in retail sales figures.
Many of the analysts, however, are merely predicting slightly less phenomenal gains--not a big drop any time soon in overall retail sales.
As has been the story for some time now, the biggest gainers were the specialty apparel stores such as Gap Inc. Gap saw same-store sales at its Old Navy stores up 27%-29%, Banana Republic up 17%-19% and even Gap Kids, which had been lagging the rest of the group, up 11%-14%.
Same-store sales are considered among the best measures of retail performance because the comparisons exclude new and closed stores. American Eagle Outfitters, which was sued last fall by Wall Street darling Abercrombie & Fitch, which alleges that American Eagle illegally copied its clothes and image, saw sales rise 33.1% in stores open at least a year, an impressive gain as same-store sales in March 1998 were up 42.5% over the previous year. American Eagle has said the suit is meritless.
Several of the large department stores posted surprisingly good showings, after enjoying only modest sales growth in previous months.
Federated Department Stores Inc., which operates Bloomingdale’s and Macy’s among others, saw same-store sales rise 9%; Dayton Hudson Corp., parent of Target and Mervyn’s, among others, posted same-store sales gains of 6.9%--with even its recently troubled Mervyn’s stores seeing sales rise 7.3% in stores open at least a year.
May Department Stores Inc., parent of Robinsons-May, did not fare as well, with sales up just 0.3% in stores open at least a year. Mid-level department stores also continued to suffer, with J.C. Penney Co. reporting a decline of 0.7% and Sears, Roebuck & Co. posting a disappointing 2.1% rise.
