WASHINGTON — Retail apparel sales in February were up across the board, with department stores posting the strongest gains, reflecting further signs of consumer purchasing strength as overall retail sales rose for the eighth consecutive month, according to the U.S. Commerce Department’s monthly report released Friday.
Department stores sales rose a seasonally adjusted 1 percent last month compared with January to $15.5 billion, while sales at clothing and accessories stores rose 0. 8 percent in February to $18.6 billion. General merchandise stores, a category that includes discounters and department stores, posted a 0.7 percent gain to $51.9 billion last month compared with January.
“We thought sales in January were likely going to be restrained by the weather and we expected to see good growth in February when the weather was much improved, and in that sense the data certainly supports that for department stores,” said Scott Hoyt, senior director of consumer economics at Moody’s Analytics. Revised data now show a drop in January sales.
Hoyt said the updated information is “less supportive” of a weather-related impact and rebound in the apparel and accessories store sales category, which has shown “steady growth over two months.” But he said weather still could have played a role, weakening sales growth in January, which was expected to get a bigger boost from payroll tax cuts.
In the overall economy, retail sales rose 1 percent to $387.1 billion, driven in part by higher gasoline prices.
“Retail sales were helped by an improving employment market, releasing of pent-up demand for automobiles, increased consumer confidence, the stabilization of the Egyptian turmoil and the increasing strength of the stock market,” said Chris G. Christopher Jr., U.S. economist at IHS Global Insight. “Most Americans have more money in their pocket due to the tax-cut compromise between the Obama administration and Congress in December.”
He added that higher gas and food prices, however, are “starting to wear on consumer spending and confidence.”
The retail apparel sales gains come on the heels of better than expected comparable-store sales for February, which averaged increases of 4.2 percent. Men’s, women’s and children’s apparel and accessories posted some of the strongest gains last month, according to Thomson Reuters.
Despite the positive retail sales picture, retailers and apparel brands are cautious about the second half when soaring commodity prices, particularly in cotton, could drive retail prices up an estimated 10 to 15 percent.
Matthew Shay, president and chief executive officer of the National Retail Federation, said retailers gauged the right inventory levels in February to meet consumer demand, which resulted in a bright sales picture last month.
But he said retailers are cautious going into the second half. “The big challenge retailers will face in the coming months, however, will be going head to head with high cotton, food and energy prices,” said Shay.
Sandy Kennedy, president of the Retail Industry Leaders Association, said retailers are “encouraged by consistent growth” in sales but are concerned about rising fuel prices ahead.
“While built-up demand and positive job growth will continue to boost industry sales, the recent dip in consumer confidence and climb in fuel prices are a concern,” Kennedy said. “It remains to be seen how much of an effect it will have on spending and if it will hamper the recent progress the economy has made.”