Guarded Optimism Accompanies February Retail Sales

In February, chain store sales across the nation stopped declining as fast as they have been for the past several months, according to the International Council of Shopping Centers (ICSC). Too soon to call it a trend, but retail experts are viewing the figures with guarded optimism.

Warm weather conducive to spring merchandise sales, lower gas prices and leaner inventories helped many chains recover some from the economic doldrums of recent months. Wal-Mart led with a year-on-year comparable-store sales rise for the month of 4.5 percent--the big box retailer's best performance since last June, when sales rose 5.8 percent (February represents its fifth consecutive month of traffic increases). Department store and specialty apparel chains fared the worst, down 9.8 percent and 7.9 percent, respectively. Luxury department stores were hit particularly badly, with sales down 19.2 percent.

ICSC expects March sales nationwide to be flat to one percent off from a year ago. ICSC is the global trade association for the shopping center industry, representing 70,000 members in the U.S., Canada and more than 80 other countries.

While recovery may be beginning, it is spreading faster in areas considered essential by most consumers. Fast food, discounted apparel, haircuts and cable television are four items people won’t cut, according to a survey of about 4,000 consumers by the National Retail Federation (NRF). Among items respondents consider expendable are luxury handbags, specialty apparel and high-end cosmetics, and they say they can dispense with fine dining as well, according to the survey. Some 80 percent of respondents said they refuse to give up Internet service, 64 percent said they would hang onto cell phone service, and 61 percent would cling to cable/satellite television--come what may. Ninety-two percent said they will give up luxury handbags for now, and 91 percent said the same about specialty apparel and cosmetics.

NRF is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.