March retail sales increased to surprise most economists. Poor performance was foretold due to adverse weather, rising gas prices and an unusually late Easter. The slight gain in retail sales may have been the result of an improving labor market and inflation. Article source – March retail sales increase comes with many investor caveats by MoneyBlogNewz.
Monthly retail revenue being measured
A Thomas Reuters survey of 25 chains throughout the nation showed that last month there was a 1.7 percent year-over-year increase in retail revenue. The numbers are depending on retail sales reported at stores open at least since last March. This can be a good measure for the metric, or "same-store revenue." This is because stores aren't opening and closing changing sales. But experts doubt whether the March increase is a solid trend in consumer demand. The consumer spending is expected to be impacted by grocery and gas prices that are increasing. Monthly sales figures are only reported by 10 percent of retailers too. It can be easier to determine how the consumer economy is when bigger businesses start to post quarterly sales. This will include businesses for instance Home Depot, Best Buy and Wal-Mart.
The importance of Easter buying
An increase in March retail revenue was anticipated. The Easter holiday was why this was anticipated. This is the latest Easter in quite a while as it falls on April 24. This year, more people will shop in April for Easter. March was when it happened last year though. The fluctuating nature of the Easter holiday has led retail experts to create a calendar period called “Mapril” to be able to get a more accurate reading on year-over-year retail sales. There was an expected boost in April sales expected this year due to this late Easter date. An increase was forecasted by the International Council of Purchasing Centers. This is a 5 to 6 percent increase anticipated. Experts could be surprised with a decrease in sales though for Mapril since there have been increasing prices in gas, food and commodities while there is a high unemployment and a terrible housing market.
Retail stock is also fun
Many other factors suggest the March retail sales increase should be taken with a grain of salt. Stock in retail may not be the best choice. Try something else Jeff Mack said from Yahoo! Finance. He cites the belief that retailers are raising costs to offset rising costs in the supply chain, which inflates revenue figures however doesn’t increase profit margins. There were larger clearance sales than normal too after the demand went down over the winter. The expectations were really low too. It may not mean anything to beat them. After the Easter bump, malls could empty and margins could shrink as customers feel the pinch of food and gas inflation.
Articles cited
Los Angeles Times
latimes.com/business/la-fi-retail-sales-20110408,0,816255.story
MSN Money
money.msn.com/business-news/article.aspx?feed=OBR&date=20110407&id=13280589
Yahoo! Finance
finance.yahoo.com/blogs/breakout/same-store-retail-sales-sell-news-20110407-073322-455.html?sec=topStories&pos=5&asset=&ccode=
Market Watch
marketwatch.com/story/retail-sales-defy-conventional-wisdom-2011-04-07
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