WASHINGTON — The retail outlook in most parts of the U.S. improved mildly in late January and throughout February despite the impact of heavy snowstorms and continued economic pressure from high unemployment rates, according to the Federal Reserve Board’s Beige Book, released Wednesday.
Several districts in the Fed’s report said the severe snowstorms in early February “held back” some sales, but retailers were still able to meet expectations for the month.
The anecdotal report from the Fed said retailers in most of the 12 districts tracked for the Beige Book noted that sales were strongest for lower-priced items and that sales of luxury items were still sluggish as the economy slowly climbs out of a deep recession.
A major snowstorm blanketed regions in the U.S. in the first weeks of February. Retailers in New York attributed slowdowns for some chains to wintry weather, noting sales in areas with less inclement conditions were stronger than expected.
Philadelphia retailers reported that the weather in February offset a mild trend of increased sales for the month. Some regions reported sales rebounds after the storms, as consumers succumbed to “cabin fever” and ventured out to go shopping when roads were clear, but retailers in Richmond noted the occurrence of back-to-back storms in that region on consecutive weekends made it hard to recover all the sales that were lost.
Aside from the snow impact, retailers reported a mixed outlook for sales. One retailer in Philadelphia told the Fed that sales were “just turning the corner.” Another store official said, “Sales will be on a plateau until employment picks up.” Many retail contacts told the Fed they expected to see sales increases in the next few months.
Consumers continued the flight to value and away from luxury that has been observed since the recession started. Retailers in Richmond said shoppers were trading down from “label apparel to the in-house brand.” Chicago retailers said sales of necessity items continued to be stronger than those of luxury ones. Stores in St. Louis noted that men’s apparel and lower-priced items outsold luxury items, and a “value-oriented” mall in Minneapolis reported a 5 percent increase in traffic volume in January.
Some regions reported a brighter outlook for mainstream and luxury purchases. Retailers in San Francisco reported a “slight pickup in consumers’ appetites for discretionary spending,” and sales at traditional department stores and discount stores rose. Department stores in Dallas saw an increase in sales, as well, despite continued price consciousness among consumers.
U.S. stocks hovered around breakeven for most of the day Wednesday, with the S&P Retail Index shedding 0.41 points, or 0.1 percent, to close at 424.38. Both the Dow Jones Industrial Average and the Nasdaq Composite Index had declines of less than 0.1 percent, landing at 10,396.76 and 2,280.68, respectively. Conversely, the S&P 500 rose less than 0.1 percent to close the day at 1,118.79.
Shares of Kenneth Cole Productions Inc. finished Wednesday’s session with a 55 cent, or 4.4 percent, increase to $13.14, earlier hitting a new 52-week high of $13.30. Late Tuesday, the company reported that, despite a higher net loss, it matched analysts’ estimates with an adjusted profit of 21 cents a share versus a year-ago loss.
In Europe, London’s FTSE 100 rose 0.9 percent to 5,533.21, while across the English Channel, the CAC 400 of Paris was up 0.8 percent to 3,842.52.
The SSE Composite Index in Shanghai was up 0.8 percent to 3,097.00, while Tokyo’s Nikkei 225 picked up 0.3 percent to 10,253.14. However, the Hang Seng Index in Hong Kong fell 0.1 percent to 20,876.79.
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