Retail sales at department stores, general merchandise stores and specialty chains were all up in March, as consumers came out of their winter freeze and brought their pent-up demand with them.
Sales at department stores led the way with a 1.4 percent seasonally adjusted increase to $13.86 billion, as sales at apparel and accessories stores gained 1.2 percent to $21.47 billion. Sales at general merchandise stores, which includes department stores, rose 0.6 percent to $55.1 billion, the U.S. Commerce Department’s monthly report showed Tuesday.
“This is a welcome improvement after severe winter weather weighed on retail sales for the last several months,” said National Retail Federation chief economist Jack Kleinhenz. “Both the composition and the magnitude of March’s rebound shows that consumers have thawed out of the harsh winter weather and [returned] to spending habits.”
The strong monthly performance came as The Retail Economist LLC and Goldman Sachs reported that chain-store sales for the week ended April 11 rose 3.8 percent over those the comparable week in 2014, making it the strongest performance since the week ended Jan. 3, when year-on-year sales rose 3.9 percent.
The strong sales month followed a tough February that saw severe winter weather and a pullback in consumer spending contribute to a decline in sales at department stores and discounters, and flat sales at specialty stores.
Kleinhenz said the early Easter, falling on April 5 compared to April 20 in 2014, played into the seasonal figures and provided some bounce.
“Though consumers will continue to spend on a selective and price-sensitive basis, we expect stronger second-quarter growth as jobs and income growth pick up,” he added.
In the overall economy, retail sales increased 0.9 percent to $441.4 billion from the previous month, following February sales that fell a revised 0.5 percent. Sales excluding gasoline and autos were up 0.5 percent last month after falling 0.2 percent in February.
“Consumers came back to life in March after lying low for the previous three months,” said Chris G. Christopher Jr., director U.S. Consumer Economics at IHS Global Insight. “Discretionary spending improved significantly in March, sending a clear signal that the poor retail sales and consumer spending numbers for February were a result of winter weather effects. In February, many households stayed at home, cranking up the heat. In March, they started eating out again, buying autos and shopping at the mall.”
Christopher said the March bounce back was especially noticeable at department and clothing stores, as well as furniture stores, auto dealerships, restaurants, and building material and garden supply stores.
“The rebound was not as strong as we expected,” he added. “Thus, we are lowering our first quarter real consumer spending growth forecast from a 2 percent rate to 1.6 percent. Looking ahead, real consumer spending is likely to be significantly stronger in the second and third quarters, since the first quarter has been hampered by weather effects which did not give many households a chance to put their gasoline price savings to use.”
Measuring more recent results, The Retail Economist-Goldman Sachs Weekly Chain Store Sales Index said retail sales for the week ended April 11 registered an index value of 591.7, their highest mark since the weekly reading was initiated with a value of 100 in 1977.
In comparison to the 3.9 percent year-on-year gain, the sequential increase was more modest — 1 percent ahead of the week ended April 4.
Figures have been seasonally adjusted to reflect the earlier timing of Easter, which tended to pull sales into March at the expense of April revenues.
“The post-Easter retail business was more robust than expected and may have been helped by the warm weather in the Southeast,” said Michael Niemira, principal and chief economist of The Retail Economist LLC. “Dollar store business was particularly strong over the past week.”
Other channels with substantial gains last week included discounters and office supply stores, while apparel and non-apparel specialty stores joined wholesale clubs and drug stores in registering results that were “up notably.”