We saw that retailers had a rough December when the Commerce Department released its retail sales figures for the last month of 2009. While we have to wait a few more weeks for the government to unveil its January retail data, a Thompson Reuters survey on the subject should give the industry something to feel good about moving forward in 2010.
According to the report, which polled 29 major retailers, sales rose by a healthy 3.3 percent rate in January. That’s more than twice what many industry analysts were anticipating and builds on Thompson Reuters’ December report that showed a 2.9 percent increase in sales.
To put things in even greater perspective, the January 2009 survey reported a sales drop of 5.7 percent, meaning the retail industry has come a long way in 12 short months.
A separate report from the International Council of Shopping Centers for retail sales last month reported increases of 3 percent as well, echoing the Reuters report and giving the retail industry a strong finish to its fiscal year, which generally ends in January.
There were several chains that reported having one of their best months in years, including Macy’s, Gap Inc. and Kohl’s. Even some higher-end merchants like Neiman Marcus, Nordstrom and Saks exceeded analysts’ expectations, indicating that American consumers have not completely turned away from spending on luxury items.
While the data from both reports is encouraging, the consensus is that there is still a long way to go for the retail industry. The nation’s dismal unemployment rate and overall ho-hum consumer spending figures, both of which are closely tied to the performance of retailers from month to month, figure to slow down the growth just a bit as the first quarter of 2010 gets underway.
The Labor Department reported yesterday that initial claims for unemployment benefits rose again last week, albeit somewhat unexpectedly. That’s now four of the last five weeks that have seen increases in workers filing for those benefits, meaning layoffs are continuing and new jobs are pretty scarce.
As we always say, it important for retailers and merchants to keep track of these kinds of economic indicators, not only because they can help explain the current economic situation but because they also tend to provide a glimpse of what’s to come in the near future. But we’d like to hear from some of you today. If you’re a merchant or retailer, leave us a comment with your thoughts on the current retail climate, where you think it’s going, and how you’re dealing with the current economic state.