RetailSails

Mother Nature once again wreaked havoc on retailers across the Northeast this past week, adding to the record snowfall tallies which have tempered sales all month. With the unseasonably cold temperatures seen across much of the country in February, shoppers were pining for cold-weather merchandise, but were hard-pressed to find winter gear as extremely lean clearance inventories held back sales.

The International Council of Shopping Centers (ICSC) reported that chain store sales fell 0.8% from the prior week, while still managing a 0.7% gain from the year-ago period. “The month finished off slightly as a result of another storm in the Northeast which pared the consumers’ ability to shop,” said Michael Niemira, ICSC’s chief economist. “However, the impacts from nature and the light volume of February sales make it difficult to read too much into this month’s performance.” Niemira added.

The company said Weather Trends International (WTI) reported temperatures for the month of February which were “the coldest in 21 years and [it was the] snowiest in at least 30 years which is a very big negative” for retail demand. However, given the constant barrage of storms, sales held up relatively well. ICSC Research expects comparable store sales for all of February to post a gain of about 2% after a 3% increase in January.

Redbook Research said that same-store sales rose 1.5% for the fourth and final week of February following a 1.9% gain the prior week. Month-to-date, sales increased 1.8% compared to the prior year and were up 1.6% relative to January. Retailers in the northeast saw relative weakness due to the severe snowstorms.

“Elsewhere, retailers are optimistic to see that early business in spring apparel is moving at full price as are other seasonal categories, primarily in the warmer parts of the country. Some cited that private label apparel is performing well,” said Redbook analyst Catlin Levis. The firm expects sales growth to benefit from Easter falling a week earlier than last year, pushing sales into March from April, and expects a 2.6% year-on-year gain for the month.

Retailers will report February sales on Thursday, and we are looking for a roughly 2-3% gain in same-store sales following a 3.0% gain in January, and compared to a 3.4% decrease last year. While sequential sales trends continue to improve, we are not reading too much into recent strength as January and February are typically the lightest month of the year for retailers in terms of volume.