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Stormy Weather Lowers Weekly Retail Sales

ICSC sees weakness at discounters, department and specialty stores.

Sales in the week bridging April and May took a step backward, according to the weekly chain store sales index compiled by the International Council of Shopping Centers and Goldman Sachs.

Sales in the week ended May 3 were 2 percent below those of the prior week as challenging weather conditions again made sales increases hard to come by. On a year-on-year basis, sales advanced 2 percent, below the 3.1 percent gain in the preceding week.

Michael Niemira, vice president of research and chief economist at ICSC, said business was “soft with notable weakness at discounters, department stores, office supply and specialty stores, but some offsetting strength at wholesale clubs and furniture stores.”

Weather took some of the blame for the weak performance, with temperatures 1.3 degrees colder than the comparable week in 2013 and “severe storms and widespread flooding in the East,” Niemira said.

The sequential decline of 2 percent was the second weakest performance of the year. Sales in the first week of 2014, ended Jan. 4, were off 5.4 percent. The decline in the week ended Jan. 18 of 1.9 percent was only slightly smaller than last week’s performance.

The SaleTally-ICSC Promotion Index showed promotional activity at department and specialty stores up over the comparable 2013 week as retailers offered storewide sales of from 10 to 20 percent off in an effort to lure shoppers.

The escalation in gasoline prices, however, was interrupted last week as the price of a gallon of unleaded fuel fell 2.9 cents, on average, after 12 consecutive weeks of increases that elevated prices a total of 42.1 cents a gallon.

But the year-on-year comparison in gasoline prices was up 4.1 percent, according to the U.S. Energy Information Administration.

With the first quarter of the retail calendar now concluded, retailers will begin reporting results later this month. Prior to that, a small sample of retailers, including Gap Inc. and L Brands, will report sales results for April on Thursday. Thomson Reuters currently estimates that the mean increase in comparable sales for the month will be 4.1 percent, an estimate reduced to 2.9 percent when the drugstores in the sample, Walgreen and Rite Aid, are excluded. The movement of Easter from March last year into April this year was cited as an obstacle to sales growth when March figures were reported last month but is expected to benefit April results.