Retail sales are expected to grow 3% to 4% this month partly because of the… (Christina House, For The…)
Americans hit the stores in February — but with only the barest of enthusiasm as they worried about bad weather, delayed tax refunds and the federal mix of tax increases and spending cuts known as sequestration.
Three separate measures of sales at stores open at least a year showed revenue dampened by economic factors such as higher gas prices, stubbornly high unemployment and a payroll tax boost.
Pasadena student Elisa Jimenez, 21, said her paycheck as a sales associate mostly went for school and fuel last month. The two pairs of pants she picked up at Forever 21 in Old Pasadena this week were her first personal splurge in weeks.
"I just didn't have the money," she said. "I'm normally a constant shopper, so it kind of bummed me out to pull back."
Sales at retail chains saw "a modest gain" of 1.7% in February, generally a slow month because of its position between the crazed holiday rush and spring buying sprees, according to the International Council of Shopping Centers. The previous month, sales rose 4.5%
Stripping out drugstores such as Walgreens and Rite Aid, the measure for February grew 4.5% — still a slower pace than in January.
Budget politics weren't the only cause of the slowdown. Analysts such as Ken Perkins pointed to "very unfavorable weather," including East Coast blizzard conditions during an early weekend in the month.
Perkins, who puts out another set of retail sales data through Retail Metrics Inc., found that sales were up 1.9%, below forecasts for a 2.5% bump. Without drugstores, the gauge was up 4.2%.
Discounters such as Costco Wholesale Corp. and PriceMart had the best month, with sales up 5.8%, he said. Teen brands such as Zumiez Inc. and Buckle Inc. slipped the most, tanking 4.6%.
Gap Inc., which runs its eponymous brand as well as Banana Republic and Old Navy, said same-store sales swelled 4% in February. The San Francisco company temporarily halted trading of its shares Thursday morning after "a vendor erroneously posted information prematurely on a public website," it said in a statement.
Competitor Limited Brands Inc. beat estimates with a 3% escalation in sales. The company owns chains such as Victoria's Secret and Bath & Body Works.
"The consumer, despite all these distractions, has shown a lot of resilience," said Marshal Cohen, an analyst with research firm NPD Group Inc. "The numbers, frankly, are better than we'd expect."
Consumer spending is a closely watched economic indicator because it accounts for the bulk of gross domestic product. The monthly retail sales reports, however, have lately become more of a divining rod for retail health than a scientific prognosis.
Major players such as Wal-Mart Stores Inc. only announce quarterly financial data. Last month, chains such as Macy's Inc. and Target Corp. began following suit.
That left only 13 retailers contributing to a monthly metric from Thomson Reuters, down from the 18 companies that reported sales in July. The measure concluded that retail sales rose a tepid 1.8% in February, or 3.9% without the drugstores.
"They're directional. They give a glimpse of what's going on, a sense of consumer sentiment," Cohen said of the slimmed-down reports. "But they're not the end-all answer."
Retailers will probably get a reprieve in March, analysts say.
The International Council of Shopping Centers expects this month's sales to grow 3% to 4%, propelled in part by an earlier Easter holiday and the switch to daylight saving time early Sunday.
Perkins said the lift will come "as temperatures rise and spring apparel and seasonal selling gets a shot in the arm." Investors cheered by the Dow Jones industrial average closing at an all-time high this week and home prices rising may also celebrate by shopping.
That means more consumers like retired actress Beverly Archer, 65, who went shopping for Eileen Fisher apparel in Pasadena but ended up hauling home three large Pottery Barn pillows.
"I'm feeling a little more energy," said the South Pasadena resident of the retail environment. "I know Wall Street wants us to spend money, so I'll cooperate. I believe it's my civic duty to go shopping."