Despite 2.1% Decline, Hope for Retail Sales

NEW YORK CITY-Sometimes numbers can be deceiving – though March 2009 comparable-store store sales declined by 2.1% from the same month of 2008, retailers’ moods seem to have lightened, and some shoppers may be emerging from hibernation as the weather turns warmer.

Many stores noted that calendar issues, including the shift of Easter into April this year, are responsible for the drop. In addition, March 2009 had one more Tuesday and one less Saturday than in 2008.

“The Easter and calendar shifts negatively impacted the industry as a whole by three percentage points,” wrote Michael P. Niemira, International Council of Shopping Centers chief economist and director of research, adding that some specific retailers were helped by the Easter shift, as they were not closed for one Sunday this year.

Declining gas sales hurt wholesale clubs, which posted a 2.3% drop. But when fuel is excluded, sales rose a healthy 4.6%. Drug stores rose 0.9%.

Discount stores saw a 0.6% drop, with Wal-Mart posting a less-than-expected 1.4% increase. TJX Cos. reported a 2% rise. Target reported a 6.3% comp drop, but cited the Easter shift as a primary reason.

“Our guests continue to be cautious, but we have begun to see encouraging signs in the operating results of both of our business segments,” said Gregg Steinhafel, chairman, president and CEO of Target Corp.

Apparel remained weak, with an 8.4% drop. Department stores declined 10.9% (with Dillard’s reporting a 19% drop and Kohl’s a 4.3% decline) and luxury stores dropped 20.3%. The teen segment posted an 18.2% decline, despite Hot Topic’s 7.1% comp increase.

There were other bright spots. JCPenney comps decreased 7.2%, an improvement over February’s 8.8% drop.

“Our success with spring merchandise shows the great work our team has done to combine enhanced style with affordable prices to deliver excellent value to our customers. The positive response we are receiving is most evident across our women’s assortments and increasingly in our home business,” said Myron E. (Mike) Ullman, III, chairman and CEO.

With Easter moving to April, ICSC expects sales to be flat to up about 1%.