Retail Survey Shows February Sales Surge
ShopperTrak Tuesday said retail sales for the week ended Feb. 21 skyrocketed 26.3% over the comparable period in 2003, citing ongoing strength in consumer demand, which propelled most retail sectors in the holiday months and
into January.
The week's results surpassed the 25.5% increase in retail sales for the prior week, and have put February year-over-year sales on pace to grow by 20.3%, the survey said.
In the comparable weeks a year ago, sales fell 2.3% and 10.4%, respectively. ShopperTrak spokesman Jason Milch said snow storms were to blame.
"Consumer demand continues to be surprisingly robust in February, which may signal that the underlying economy is improving," said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers. "Clearly, the recent weakness in consumer confidence reported by a number of experts is not reflected in consumer spending trends."
"Consumer confidence has been up for a while now," said Milch. "The holidays were big and expendable income is also a big factor," he said.
The Conference Board's consumer confidence index increased to 96.4 in January, from 91.7 in December and 92.5 in November, but dropped to 87.3 in February. Still, January's reading was the highest since July 2002.
And the University of Michigan's preliminary reading of consumer sentiment for February came at 93.1, which was lower than January's 103.8. Analysts currently expect the revised reading for February to be 94. That compares with a reading of 79.9 in February 2003.
Richard Hastings, retail sector analyst at Bernard Sands, had no immediate explanation for the jump in February sales. "Nobody knows why," he said, but noted that January's chain store sales were up sharply.
"There is an unusual increase in chain store sales and yet what is so curious is that the Census Bureau's report on fourth-quarter online retail sales were up only moderately," said Hastings. "Auto sales are down, online retail sales were up not as much as expected and yet chain store sales are up sharply."
Hastings said he was not surprised that the prior week's results were so strong because "Valentine's Day has turned into a gigantic holiday."
It's possible that consumers have stopped spending on larger ticket items, such as automobiles and furniture, and are increasing spending on discretionary seasonal items, such as footwear and jewelry, Hastings said. He expects it will take a few more months of data to find out happened.
If spending on large-ticket items has stopped, Hastings said, then chain retailers and specialty retailers in malls would be where this kind of spending would show up, which are the types of locations ShopperTrak tracks.
ShopperTrak's National Retail Estimate snapshot is derived from the U.S. Commerce Department's general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store-sales statistics, as well as ShopperTrak's proprietary devices, which are installed at the entrances of 30,000 nationwide retail stores. The devices are linked to the sales registers and automatically count store traffic and sales. The figures are sent to a central server, which tabulates the overall sales percentage for a given period.