Spring Sales Fever

For many store owners it was an early spring, with warm weather and high demand for spring fashions, and retailers saw a clear boost in revenue. From discount and department stores to smaller brick and mortars, retailers reported better than expected sales in March, a sign that Americans are feeling better about the economy. And as Industry Leaders magazine points out, “Even though only a few retailers report monthly figures, industry analysts believe March sales itself is a strong reason to be optimistic. This is because the numbers offer a picture of consumer spending, which accounts for more than 70 percent of all economic activity.” Sales at stores open at least a year, which retailers use to gauge ongoing demand, rose an average of 4.3 percent in March, better than the 3.5 percent increase analysts had expected.

That average included strong results from well-known retailers like Target and Macy’s, which both had increases of 7.3 percent, and the Gap, which boosted sales by eight percent. Results did not include giants such as Walmart, or New Jersey based retailers like The Children’s Place, which do not report monthly sales. According to the Boston Globe, “Apparel stores blew through estimates, with their sales rising 8.5 percent, versus the 4.9 percent analysts had expected.” “The clothing industry has just taken off,” says Chris Christopher, U.S. economist for research firm, HIS Global Insight. “The unseasonably warm weather that started in February,” he notes, “helped spring clothing sales, after dismal sales of winter clothes in January.”

Many analysts believe there is more than higher temperatures at play when it comes to the reason behind the increase in spending, especially as many Americans have been claiming they’ll be saving their tax refunds and staying in because of gas prices. One of the top reasons for this increase in retail revenue could be the improving job market. However, Joel Bines, managing director of the retail practice of AlixPartners, thinks, “There’s a growing belief we reached bottom a while ago. Rather than confidence that things have turned the corner, it’s confidence that things are unlikely to get worse from here.” Whatever the reason, retailers have been rewarded.