WASHINGTON — Consumers largely brushed off higher gas prices last month, driving up seasonally adjusted specialty store sales 2.7 percent, compared with April, as department stores registered a 1.3 percent rise.
Sales at all retail and food service businesses rose 1.4 percent, the largest increase in 16 months and more than double what economists were forecasting. The boost reversed a 0.1 percent decline in April, when unseasonably cool weather and an early Easter conspired against stores.
Shoppers' appetite to spend despite prices at the pump — a gallon of regular sold for an average of $3.09 in May compared with $2.78 in April, according to the American Automobile Association — triggered a surge Wednesday on Wall Street. The Dow Jones Industrial Average jumped 1.4 percent to 13,482.35. The S&P Retail Index advanced 1 percent to 518.36.
In addition, the Federal Reserve's Beige Book survey said economic activity was picking up, based on anecdotal information collected before June 4.
"Overall, the retailers are not in bad shape, they're just not market leaders right now," said Bill Rhodes of Rhodes Analytics, a research firm in Boston. "The market is going to be following this pretty closely. This was a wake-up call."
Specialty stores have been outpacing department stores, which is a sector in transformation as Macy's has grown into a national retailer after its acquisition of May Department Stores Co.
Compared with a year ago, department store sales fell 0.7 percent in May to $17.6 billion, as apparel and accessories stores posted a 7.8 percent increase to $19.1 billion, according to the Commerce Department.
Same-store sales reports from retailers last week showed an overall uptick, though merchants catering to the luxury customer, such as Saks Fifth Avenue, fared better than more moderate chains, including Macy's and J.C. Penney.
"Apparently, we were all buying stuff at the smaller stores and not spending money at the big retail chains," said David Wyss, chief economist at Standard & Poor's, pointing out the disparity between the large companies reporting same-store sales and the broader Commerce figures.
"There's no sign that we're stopping," said Wyss. "Consumers are out there spending more than they've got, so I think we'll continue to live beyond our means. It can't go on forever. We do have to slow down at some point."Along with the ready access to credit, the job market — a key economic ingredient for consumer spending — was relatively strong last month with 157,000 new jobs and unemployment of 4.5 percent.
The Fed's Beige Book showed that the economy generally expanded in late April and May. Offering anecdotal readings from businesses in the Fed's 12 districts, the report also found consumers spending more, especially on luxury items.
In Philadelphia, for example, luxury retailers outside of the jewelry business showed double-digit growth, while low-end merchants showed little to no increase and malls reported less traffic, but higher average purchases.
The report said that an apparel and sporting goods merchant in the Boston area noted that although sales have been mixed over the last few months, same-store sales for the year were up more than 5 percent.
"You can't divorce people from their spending habits," the merchant said.
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion
“I’m Russian and I love to use all these little tricks that I got from my grandma or my mom. We didn’t have a lot of money for creams or anything like that so we would use a garden as a beauty treatment regime. We’d put cucumber in the fridge and do a cucumber mask,” says model @irinashayk on one of her beauty hacks. WWD asked celebs what their go-to self-care rituals are. See what Naomie Harris, Freida Pinto and more said on WWD.com. #wwdeye #wwdbeauty (📷: @zefashioninsider)
Exclusive: @viktorandrolf are teaming up with @Zalando on a collection made from leftover clothing. The lineup, which lands at the retailer February 1, includes 17 pieces adorned with sliced up and repurposed overstock from the retailer’s private label collection. Pictured here is a look from the collection –– see more on WWD.com. #wwdfashion #wwdnews
@duewestnyc is the newest bar joining the collection of intimate neighborhood-focused spaces in the West Village. The cocktail menu, which includes bitters and syrups made in-house, offers a “Build Your Own Old-Fashioned” – like the one pictured here – where guests can choose from a list of spirits and unexpected sugars and bitters. #wwdeye
Spotted at last night’s National Board of Review gala in NYC: Angelina Jolie. Jolie – along with Meryl Streep, @lupitanyongo and more – continued the all-black dress code from Sunday’s Golden Globes. #wwdeye (📷: @lexieblacklock)