U.S. Same-Store Sales Disappoint

Sales rise 0.5 percent at stores open for more than one year, far short of the previously forecasted 1.7 percent growth.

May 10, 2010

NEW YORK - U.S. retailers last week reported April same-store sales well below expectations, the Financial Times reports.

Sales rose 0.5 percent at stores open for more than one year, far short of the estimated 1.7 percent growth, according to a Thomas Reuters compilation of figures.

The shortcoming was attributed to poor weather in April and a shift of spending toward March because of an early Easter holiday this year.

Membership club retailer Costco reported the largest gain at 11 percent, due in part to higher fuel prices, though short of an expected 11.2 percent increase.

"The bounce in the business that began last summer seems to be cooling as demand is satiated for televisions, and consumers ever so lightly migrate back to the likes of Target and specialty retailers given improved economic conditions," said Brian Sozzi, of forecasting firm Wall Street Strategies.

Target sales dropped nearly 6 percent in April, far greater than the previously forecast 2.3 percent drop. In addition, specialty retailers fared particularly poorly: Gap sales fell 3 percent, while they had been forecast to grow 1 percent; and Abercrombie & Fitch sales dropped 8 percent, far greater than the 2 percent forecasted decline.

A few retailers exceeded expectations, mainly higher-end retailers: Nordstrom??s sales rose 7.5 percent, and Limited Brands increased 4 percent. Both of those results exceeded previous estimates.

The overall rise in sales coincided with an increase in consumption generally. First quarter U.S. consumer spending increased 0.6 percent, and personal consumption represented 2.6 percentage points of the Q1 GDP growth figure of 3.2 percent.

"The trend is still upwards, but it??s not going to be a smooth ride," said Julia Coronado, senior US economist at BNP Paribas. "There will be less government support for incomes going forward, but we are starting to see the labour market turn the corner."

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