Is Retail’s Glass Half Full in 2010?
On the heels of an exceptionally strong March, many could
not be blamed if they were secretly hoping for a blowout April even if most
economists predicted sales would be muted; perhaps even down a bit. Now that
the numbers are in — chains were up slightly for the month — most are looking
at the combination of March and April as an encouraging sign that consumer
spending will not suddenly dry up as it did when the financial crisis hit home
in the Fall of 2008.
According to Thomson Reuters, sales at 28 major
retail chains were up 0.5 percent versus the same period last year. This followed
a 9.1 percent year-over-year increase in March. Taken together, sales during
March and April were up 4.8 percent over 2009.
"Things are definitely looking up," Randy Brant, head of real estate
for department stores at mall operator Macerich, told the Los Angeles Times. "More
retailers are talking about expansion again, and consumer confidence is up.
Sales and traffic are starting to pick up in all our centers."
Council of Shopping Centers’ (ICSC) Index of 30 retailers had sales up 0.8
percent this year compared to a 2.7 percent drop last April. For March, the
ICSC had retailers achieving a nine percent gain, the strongest year-over-year
gain since 1999. The combined numbers for March and April were up 4.9 percent
in the ICSC Index, well above the 4.1 percent increase retailers have been
tracking since January.
Beyond revenues, many are most encouraged by the fact
that retailers are driving much of these same-store gains without having to
revert to extreme discounting.
"The real takeaway is that profitability continued to improve on the healthy
underlying demand," Michael Niemira, chief economist at ICSC, told The
Discussion Questions: With four months of numbers in for the retail
industry, what are you seeing for the rest of the year? What sectors of
the business and specific retailers are you expecting to outperform the average
- April retail reports add up to respectable spring – The Associated
- Weak April retail sales show uneven recovery – Reuters
retail recovery continues in April but at a slower pace – Los