Dive Brief:
- Retail trade sales rose 0.6% from February to March, and 4.7% from March last year, the U.S. Department of Commerce said on Monday. E-commerce rose 0.8% in March and 9.7% year over year, according to the report from the department’s Census Bureau.
- Various segments, as always, saw different results in March. Furniture sales rose 0.7% from February and 3.9% from March last year; electronics and appliance sales rose 0.5% from last month and 1% from last year; clothing and accessories sales fell 0.8% from last month and rose 1.8% from last year; general merchandise store sales rose 0.3% from last month and 3.2% from last year, and department store sales fell 0.3% from last month and 0.9% from last year.
- Several retailers were aided by an early Easter, which helped bring April sales into March and make up for “lousy weather” in many areas, according to analysts at Retail Metrics. March same-store sales rose a better-than-expected 8.1%, and Retail Metrics expects first quarter retail earnings to rise 15% year over year, according to comments emailed to Retail Dive.
Dive Insight:
The economy is chugging along nicely at this point —consumer confidence is high, unemployment is low and wages are growing — although the March employment picture was a disappointment, and some experts believe that uncertainties introduced by talk of tariffs and trade wars may be interrupting an employment turnaround.
Macroeconomic fundamentals underpinning the economy remain strong, and companies are in a position to invest, but Challenger, Gray & Christmas CEO John Challenger last week cautioned that a period of job creation may be coming to an end as wages grow and labor markets tighten.
April is poised to get the brunt of the early Easter, and sales could suffer further with total tax refunds down 60 basis points year over year through March 30, according to weekly data provided by the IRS, which Retail Metrics termed “a modest negative.” That and rising fuel prices, up 14% year over year and 29% on a two-year basis, according to Retail Metrics, could be keeping consumers from stores.
“Our store checks found solid traffic and conversion in the week leading up to Easter but generally sluggish during the rest of the month,” Retail Metrics President Ken Perkins said in comments emailed to Retail Dive. In all, first quarter same-store sales for Retail Metrics’ Quarterly Same Store Sales index are forecast to be up a modest 2.1% from last year, a 120 basis point sequential decline from fourth quarter’s 3.3% increase. But that would also be the second largest quarterly gain in the last three years, according to that report.
