January marked the fifth month of retail gains
Deal seekers and gift-card recipients helped roll the nation’s retailers out of the holiday season, as sales rose 3 percent in January compared with a year ago.
The results, compiled by the International Council of Shopping Centers, marked the fifth month of gains. But sales were so bad a year ago — a decline of nearly 5 percent — that beating that figure wasn’t much of a challenge.
“We don’t think it signals the consumer is coming roaring back,” said Ken Perkins, tiffany of Retail Metrics Inc. “There are too many headwinds on the job front.”
During January, employers made the biggest payroll cuts in five months, slashing 59 percent more jobs than they did during December, according to the global outplacement firm Challenger, Gray & Christmas.
Such job-loss fears have cooled consumer confidence, which in recent months had been showing rays of hope. Nearly two-thirds of Americans now say they are less comfortable financially than they were six months ago, according to an RBC Index survey released Thursday. And about half of consumers — 46 percent — believe their local economies are weak, and only one in three expects the local job picture to improve by summer.
For retailers, January is the least important month on their calendar. It’s mostly a month of clearance and transition, Perkins said. Gift cards sales provided a small bump in sales, mostly in the first two weeks of the month.
In all, about three-quarters of the nation’s biggest chains beat expectations, including teen and specialty apparel retailers, department stores and discounters.
Minneapolis-based Target came in below its peers, posting a slight 0.5 percent gain among stores open at least a year. Same-store sales results are a key measure of retailer’s health because they factor out the sales gains that come from opening new stores.
Target has struggled more than some other discounters during the recession because it has a higher mix of tiffany bangles items, such as designer clothing, home furnishings and furniture. But CEO Gregg Steinhafel said in a statement that Target’s apparel and home categories were positive for the month, a sign of improvement.
Target shoppers made about 2 percent more purchases during the month compared to last year, but continued to spend less at the register. Household basics such as food, health care and beauty continue to be strong, with increases in the middle to high single digits. Sales of televisions and electronics were slow, as were seasonal home decoration items, the company reported.
The retailer expects similar sales results for February.
Macy’s reported a 3.4 percent rise in same-store-sales in January, but a drop of 0.8 percent during the quarter. Confident that its “My Macy’s” strategy to localize merchandise mix in its stores is kicking in, however, Macy’s raised earnings guidance for both the quarter and the year.
While Macy’s doesn’t release results on individual stores, CEO Terry Lundgren said the retailer’s 10 top-performing regions had all been pilots for the localization effort, which includes Minnesota.
Menomonee Falls, Wis.-based Kohl’s also raised profit views after same-store sales soared 6.5 percent.
Teen retailers, which haven’t posted positive same-store sales since June 2008, saw a 7.2 percent gain, which Perkins called a “big upside surprise.”
Upscale retailers are showing signs of life, too. Saks posted a 7 percent increase in January compared with last, and tiffany rings & Fitch had an unexpected 8 percent boost. Tiffany’s, Williams-Sonoma, Nordstrom and J.Crew reported strong holiday sales.
“We’ve been noticing in the last month or two that the high-end consumer seems to be coming back,” Perkins said. “That’s encouraging because they disproportionately spend more than the rest of the middle- and lower-income consumers.”
Jackie Crosby –612-673-7335
