Retail sales heat up in May amid warmer weather
Consumers emerged in May to give retailers their best month since January, lured by warmer weather and the confidence lift from the surging stock market and rising housing prices.
Same-store sales increased 4.8% from a year earlier, beating expectations for a 3.7% boost, according to Thomson Reuters. The gauge outperformed April’s 2.2% upswing as well as the 0.5% increase in May 2012.
Stripping out the effects of drugstores, last month’s measure was up 5.6%. The data include revenue only from locations that have been open at least a year.
Victoria Holt, 46, has scaled back her spending on the social scene but said she is “opening up a bit” when it comes to shopping. This week, she picked up some new clothes and also grabbed some home goods from the new City Target store at the Beverly Connection.
“It’s not like I’m being super indulgent, but I have been treating myself lately,” said Holt, a West Hollywood teacher. “You can get all these designer things for next to nothing.”
Her own financial situation hasn’t changed, but store discount policies have, Holt said.
“I’m blown away by the prices — they’re so cheap,” she said.
Seasonal bargains lured consumers, as did thawing temperatures. Chilly climes around the country in March and April — and to some extent in May — delayed shopper spending on lighter clothes and home improvement products.
But Americans also felt more financially stable last month, Michael P. Niemira, chief economist for the International Council of Shopping Centers, said in a statement.
“The underlying improvement in the U.S. economy, along with rising stock and home prices, are helping to lift the sales pace,” he said.
The stock market continued its yearlong rise in May, steadily rolling past record highs before slumping toward the end of the month. The real estate market is riding a rebound and, according to the University of Michigan, consumer confidence reached pre-recession levels.
“The sun’s starting to come out,” Holt said. “People are being careful, but they’re also feeling more secure — the world hasn’t completely collapsed.”
Some hitches, however, kept retail sales from powering even higher.
Gasoline prices increased last month in their first upswing since February, frustrating many budget-minded travelers at the start of the summer vacation season.
The employment market also seemed shaky. Private-sector job growth disappointed, despite ticking up 135,000 positions in May, payroll processing firm ADP reported this week.
Still, consumers felt comfortable enough to hit the malls, said Ken Perkins, who calculates a separate retail sales roundup via Retail Metrics Inc. His figures showed sales increasing 3.5% last month.
At the front of the pack was American Apparel with a 10% jump, driven in large part by record sales in its wholesale division.
Warehouse club Costco Wholesale Corp. enjoyed a 5% upturn. Gap Inc., which owns brands such as Banana Republic and Old Navy, increased 7%.
L Brands Inc., however, slightly missed Wall Street predictions with 3% sales growth, compared with a 6% advance a year earlier.
The company’s Victoria’s Secret subsidiary leaned on its Pink collection and Mother’s Day interest in its beauty offerings to turn in a 4% sales lift, according to RBC Capital Markets analyst Howard Tubin.
The overall teen category lagged behind 2012 numbers, reporting a 3% increase compared with the 5.3% rise in May 2012, according to Thomson Reuters.
A more comprehensive look at the industry will emerge June 13, when the Commerce Department releases its own retail sales report.
The retail sales summaries unveiled Thursday by private organizations have lost much of their meat this year. Dozens of major retailers, such as Wal-Mart Stores Inc. and Target Corp., once reported monthly revenue figures; now they choose instead to report quarterly data.
In May, only 11 chains offered up monthly same-store sales statistics.
Ann Inc. said Thursday that the measure for its first quarter, which ended May 4, was up 1.9% for its Ann Taylor brand and down 1.9% at Loft.
In June, the International Council of Shopping Centers expects another same-store sales increase of 3% to 3.5%. The group said the tally gained 3.2% in May.
