WASHINGTON — Sales at specialty stores and department stores fell last month, in line with a decrease in sales in the overall economy, the U.S. Department of Commerce’s monthly report showed today.
Sales at apparel and accessories stores dropped a seasonally adjusted 0.8 percent to $21.2 billion compared with December levels, while sales at department stores declined 0.7 percent to $13.8 billion. Sales at general merchandise stores, a category that includes discounters and department stores, rose 0.1 percent to $55.3 billion.
In the overall economy, retail sales fell 0.8 percent in January to $439.8 billion. But retail sales excluding autos and gasoline increased 0.2 percent last month.
“The fact that retail sales minus gas station sales were flat suggests that consumers are not taking their savings from the gas pumps and going out and aggressively spending it, at least at apparel retailers,” said Scott Hoyt, senior director of consumer economics at Moody’s Analytics. “Some of the [decreased spending from falling gasoline prices] will be saved and some may be used to purchase services or electronics.”
Hoyt noted that there has been weakness at specialty stores and department stores for several months. On a year-over-year basis, sales at apparel and accessories stores were up 2.7 percent in January, while sales at department stores were 0.3 percent higher and sales at general merchandise stores were up 1.8 percent.
“The thing to keep in mind about the year-over-year comparison is those numbers are somewhat inflated,” Hoyt said. “January of last year had huge winter storms and consumers were not able to shop. The fact that retailers are posting such weak numbers against what should have been a relatively easy comparison makes those numbers [for January] even weaker than they seem.”
Hoyt said Moody’s expects “things to pick up” in the first half.
“With job growth remaining strong…we think the prospects are good going forward, broadly speaking,” he said. “Can apparel retailers figure things out and win back some of the share of that spending they seem to be losing right now, or will they continue to be lower on the totem pole? It’s hard to say.”
Chris G. Christopher Jr., director of U.S. consumer markets for IHS Global Insight, said, “This is not the best report, but it indicates that Americans were taking some of their gasoline savings in December and January and were willing to spend it. In addition, over the past several months, restaurants and online retailers have been doing relatively well.”
The outlook for consumer spending this year is “rather bright” Christopher said, due to lower gasoline prices, increasing consumer confidence, strong price discounting by retailers and stronger income growth.
“We expect real consumer spending growth to be significantly more balanced in 2015 compared with 2014, with significant acceleration in nondurables and services, while durables are likely to grow at a slightly faster pace,” Christopher said. “Auto sales are expected to increase over the next three years, but at a significantly slower pace than the growth rates experienced over the past five years. That leaves some extra dollars for Americans to buy some other types of big-ticket items.”