Retailers report positive March sales
NEW YORK — Retailers from discounter Target to department-store chain Macy’s reported better-than-expected sales in March in the latest sign that Americans are feeling better about the economy.
A combination of warm weather and high demand for spring fashions boosted revenue for the month, but analysts said there’s much more than higher temperatures at play. Americans who cut back on spending in the slow economic recovery are encouraged by the improving job market, they said.
“There’s a growing belief we reached bottom a while ago,” said Joel Bines, managing director of the retail practice of AlixPartners “Rather than confidence that things have turned the corner, it’s confidence that things are unlikely to get worse from here.”
Even though only a handful of retailers report monthly figures, industry watchers said March figures are a reason to be optimistic. That’s because the numbers offer a snapshot of consumer spending, which accounts for over 70 percent of all economic activity.
Overall, revenue at stores open at least one year rose 4.1 percent, according to a preliminary tally of 22 retailers by the International Council of Shopping Centers. That figure is within the range of the group’s March estimates, but several retailers from luxury chain Saks to food and fragrance retailer Limited Brands had monthly gains that beat their own expectations.
The strong sales reports were boosted by unseasonably mild weather and a flurry of positive economic news. The housing market had its best winter in five years. Consumer confidence was relatively flat in March, but near February’s 12-month high. And today a government report on March job growth is expected to show the fourth straight month of strong hiring.
“Not only did we have nice weather, we’ve also taken a bit of a breather from the shocking economic news that we have had,” said Laura Gurski, a partner and global head of A.T. Kearney’s retail practice. “There’s a calming down or feeling that the economy is settling in and starting to trend more positive from an American standpoint.”
Clothing chains in particular benefited from heavy demand for spring fashions, like brightly colored denim. “Stores are showing something new and different from a fashion perspective and that’s getting people into the stores,” said Alison Levy, senior manager at consulting firm Kurt Salmon.
Even Gap, which had been struggling recently, reported gains. The retailer, which owns Gap, Old Navy and Banana Republic, was one of the biggest success stories of the month, with revenues up 8 percent.