April '07: Retail Sales Stumble After Easter
The performance of the retail sector decreased 2.4 percent in April, according to the New York–based International Council of Shopping Centers. It was the largest decline since April 2002. Economists and retail analysts said that they still don’t know if April’s poor sales performance was an isolated stumble or a harbinger of a slowing economy.
The drop was a disappointment because March’s retail sales increased 5.9 percent, and it gave the economy a lot to cheer about. However, to many in the industry, April’s performance was not a surprise. The ICSC had forecast a decline in sales 0.5 percent to 1 percent.
The Easter calendar shift was one anticipated reason why April sales would drop. Consumers shopped in March for Easter items because the holiday fell on April 8. The pre-Easter shopping made cash registers ring in March. Business was expected to be slower in April.
Yet retailers and economists did not count on weather being so horrible across much of the United States during the past month. According to Weather Trends International, it was the coldest April in a decade and the wettest April in four years. The lousy weather kept consumers from going to the mall and dampened demand for Spring clothes such as shorts and T-shirts.
Other economic news such as a declining housing market and increasing fuel prices made April turbulent, said Jeffrey Van Sinderen, a retail analyst for Los Angeles–based B.Riley & Co.
“Is it a lull?” Van Sinderen asked. He said that if the economic performance of March and April were taken together, recent results were not so bad.
However California should hold a steady economic course, aside from housing declines, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp.
“We will do a little bit better than the rest of the U.S.,” Kyser said. “But we must keep fingers crossed that consumers can deal with high gas prices.”
The apparel sector generally performed poorly during April. Sales declined 10.1 percent, according to the ICSC. The month’s winners were luxury department stores, which saw a sales increase of 4.3 percent. Same-store sales for Seattle-based Nordstrom increased 3.1 percent, and same-store sales for Saks increased 11.7 percent in the past month. —Andrew Asch
