As the Northeast gets pounded by a powerful Nor’easter, blustery winter weather last week was blamed for a drop in the Retail Economist-Goldman Sachs Weekly Chain Store Sales Index. And in a separate data report, in-store sales and traffic were significantly down last month.
The weekly index for the period ended March 11 showed a 0.3 percent decline. The drop was the fourth week in a row of declining sales. Michael P. Niemira, chief economist of the Retail Economist LLC, said on a year-over-year basis “sales rose by a sluggish 0.3 percent.”
“Returning winter weather in the East, which hurt seasonal demand, and sales pulled forward in the prior week contributed to a soft sales picture for the week ending March 11,” Niemira said adding that over the past week, “retail business was down on a year-over-year basis across all segments tracked.”
Drooping sales last week follow lackluster sales and traffic for February, according to in-store data from RetailNext. “February 2017 was a difficult month for physical retail with week 2 being the toughest of the month,” the firm noted. “Sales, ATV [average ticket value], and shopper yield all experienced sharper declines than the last six months.”
RetailNext said sales were down 13.8 percent for the month, and traffic was down 12.8 percent. The company said this was the “largest decline of any month other than December 2016.” In-store conversion rates, though, were positive.
The woes of brick-and-mortar retailing was the topic a recent report from Ike Boruchow, senior analyst at Wells Fargo Securities. Based on meetings with retail real estate executives, the analyst said there “appears to be a portion of the real estate industry that views store-traffic declines as a self-inflicted issue for retailers (at least partially), due to a lack of investment in the store fleets.”
Boruchow took retailers to task on the issue. “Simply put, many retailers rested on their laurels and assumed that they could continue driving traffic/sales without enhancing the in-store experience (particularly among the department stores),” he said. “We believe there is a kernel of truth here, as the few retailers that are performing well in the brick-and-mortar channel (like Coach, Finish Line) have been investing in store renovations/upgrades to make for a more compelling store experience.”
The analyst went on to say that many retailers believe their stores are a destination for shopper, “but only a handful have invested in the in-store experience adequately.”