By  on April 17, 2007

WASHINGTON — Warmer weather and an early Easter fueled a substantial increase in sales at specialty stores in March, but the combination of factors did not help sales at department stores.

The strong showing at specialty stores in the Commerce Department's monthly retail sales report released Monday was a reflection of continued growth in consumer spending despite a rise in gasoline prices and an earlier Easter, which fell eight days earlier than it did last year.

Apparel and accessories stores posted seasonally adjusted sales of $18.8 billion, a 2.4 percent increase compared with February, and a sizable 8 percent gain from March 2006. However, department store sales fell 0.2 percent in March, to $17.4 billion, compared with February and were off 1.9 percent from a year ago.

"The big winners in March were clothing stores, whose shoppers splurged on new spring apparel," Rosalind Wells, chief economist at the National Retail Federation, said in a statement. "Clearly, the weather and the early Easter had a desirable impact on retail sales."

The Commerce Department report confirmed what individual specialty retailers reported last week in releasing robust March same-store sales, but contrasted with department store sales reported by individual retailers, which rose on a comp basis.

Total retail and food service sales increased a seasonally adjusted 0.7 percent during March. Other sectors that rose for the month included furniture and home furnishing stores, and sporting goods, hobby, book and music stores, while electronics and appliance store sales dropped in the month.

"The good news from today's report is that consumer spending continues to soldier forward in spite of higher gasoline prices and a sharp slide in consumer sentiment," Brian Bethune, U.S. economist at Global Insight, wrote in a report. "Good employment growth combined with solid wage gains will continue to support consumer spending and keep the business expansion moving forward in 2007."

Other economists cautioned against reading too much into the strong retail numbers in March.

"To me, it is not a strong sales number," said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. "It looks like a bounce from a bad fourth quarter, which tells you the basic spend pattern is alive. But it's not like the economy is riding on all four cylinders."

To access this article, click here to subscribe or to log in.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus