March Retail Sales Are Disappointing
Fed report shows CE/majap drop, but some observers see hopeful signs
By Alan Wolf -- TWICE, 4/20/2009
WASHINGTON — The U.S. Commerce Department said sales at electronics and appliance stores fell 10 percent in March from the comparable year-ago period, casting a pall over recent indications of an economic recovery.
Viewed sequentially, March sales at CE and majap stores dropped 5.9 percent from February on a seasonally adjusted basis, according to the Commerce Department’s monthly retail sales report. The year-over-year decline was unadjusted for calendar and holiday shifts.
Sales at sporting goods, hobby, book and music stores decreased 3 percent unadjusted over last year, and slipped 0.9 percent seasonally adjusted over last month.
According to analysts, the government’s monthly retail sales data is heavily skewed toward Best Buy within the CE/majap channel. The numbers also contradict anecdotal accounts from independent brown- and white-goods dealers who reported strong sales in March.
Shares of Best Buy slid 5 percent in the hours following the release of the report, which also prompted a downgrade by analyst Stacy Widlitz of Pali Capital. Widlitz said the 10-percent CE/majap decline was the worst since December, and cited a drop in CE sales last month at Wal-Mart.
Total retail sales (which include non-general merchandise categories such as car dealerships, gasoline stations and restaurants) decreased 1.1 percent seasonally adjusted over February and decreased 10.6 percent unadjusted year over year. Retail industry sales for February were revised upward, increasing 0.3 percent instead of dipping 0.1 percent as originally reported.
Absent autos, gas and food, retail industry sales decreased 0.6 percent in March seasonally adjusted from February, and dropped 3.7 percent unadjusted over last year.
The retail retreat was reflected in the March sales results for several national discount chains.
But there are hopeful signs. Electronics/appliance chain hhgregg raised its preliminary net sales and earnings results for the fourth quarter and fiscal year, both ended March 31, due in part to the closing of Circuit City. (See story above.)
And Wal-Mart’s U.S. stores broke that trend with a 2.6 percent gain in sales to $23.75 billion in sales while Sam’s Club’s net sales were up 2.2 percent. (Wal-Mart’s international sales were down for March by 14.8 percent.)
“Based on the initial strength of our sales this week, we expect Easter to drive April sales performance,” said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores on April 9 when the chain released its March sales report.
Comp store sales for March, without fuel, were up 0.6 percent at Wal-Mart’s U.S. stores, down slightly from last year’s 0.8 percent gain. Sam’s Club reported a comp sales increase of 6.2 percent without fuel, compared with a drop of 0.5 percent last year. Sam’s cited office electronics sales as one of the highlights of the month.
But sales were down for Target and Costco, while BJ’s Wholesale Club inched up slightly.
BJ’s reported a 1.7 percent increase on sales of $870 million for the period ending April 4. Target’s dipped 2.3 percent to $5.5 billion and Costco was down 3 percent to $6.39 billion.
All three suffered from comp-store sale decreases; however, BJ’s stated that when the impact of gasoline sales for the month was subtracted, comps were essentially flat for March. Costco was also negatively impacted by gasoline sales and foreign-exchange issues. When these were excluded from the total, its comp-store sales rebounded from a 2 percent loss to a 3 percent gain. Target’s March comp-store sales fell 6.3 percent.
However, Gregg Steinhafel, Target’s chairman, president and CEO, said he is seeing some light at the end of the tunnel.
“Our guests continue to be cautious, but we have begun to see encouraging signs in the operating results of both of our business segments. In light of the Easter shift and recent trends, we expect our April reported comparable-store sales results to be essentially flat to last year,” he said.
The National Retail Federation (NRF), the retail industry’s largest trade group, blamed last month’s downturn on the weather and echoed Target’s improved outlook for April.
“A chilly start to spring and a late Easter combined for dreary March sales,” said NRF chief economist Rosalind Wells. “To compensate for the Easter shift, retailers typically look at March and April together to get a better look at how their stores performed. Easter should give a much-needed boost to April sales.” — Additional reporting by Doug Olenick and Steve Smith
March Retail Sales Up, But CE's Impact Mixed
04/21/2008March Retail Sales Up,But CE's Impact Mixed
04/10/2008CE Retail Sales Wilt In July
08/09/2001Wal-Mart To Slash Greenhouse Gasses
02/26/2010
VIEW ALL GALLERIES