Sales

NRF: March Retail Sales Climb 5%, Three-Month Average Jumps 4.8%

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The March results build on the higher sales seen in February, which was up 0.2% over January and 4.3% year-over-year. These numbers exclude sales of automobiles and at gasoline stations and restaurants.

The NRF numbers are based on data from the U.S. Census Bureau, which said overall March retail sales — including automobiles, gasoline and restaurants — were up a seasonally adjusted 0.6% from February, and up 4.5% year-over-year.

“This is a healthy spending report despite market volatility, unseasonable weather and uncertain economic policies,” said NRF Chief Economist Jack Kleinhenz in a statement. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home values and judicious use of credit. The biggest risk to spending is in market fluctuations that could affect confidence, but we expect these basic improvements in economic fundamentals to continue.”

All sectors except sporting goods saw sales improvements in March on a year-by-year basis. Sporting goods stores saw sales declines of 0.9%.

  • Online and other non-store sales: up 7.6%;
  • General merchandise: up 6.3%;
  • Clothing and clothing accessories: up 6.1%;
  • Grocery and beverage: up 5.9%;
  • Furniture and home furnishings: up 4.1%;
  • Building materials and garden supplies: up 3.8%;
  • Electronics and appliances: up 1.6%; and
  • Health and personal care: up 0.4%.

April retail sales jump 0.4% as e-commerce climbs 9.6% from last year

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Dive Brief:

  • Retail sales in April (excluding sales from auto dealers, gas stations, building materials and food services) rose 0.4% from March 2018, according to the latest monthly report from the U.S. Commerce Department’s census bureau. March sales were revised upward to a 0.8% rise, from the previously reported 0.6%.
  • Nine of the 13 major retail categories posted positive sales results in April compared with March, according to retail think tank Coresight Research’s breakdown of the report. Clothing and accessories rose 1.4%, furniture sales rose 0.8% and e-commerce rose 0.6%. But health and personal care sales fell 0.4%, and electronics and appliance sales fell 0.1%, the Census Bureau said.
  • E-commerce sales in the period rose 9.6% from last year, while overall retail sales excluding auto rose 4.8% year over year, according to the government’s report.

Dive Insight:

April marked another month of robust sales for retailers, despite a cold spring in many parts of the country, thanks to an overall healthy economy.

“Spending was sluggish at the start of 2018, but April marked the second consecutive month of growth,” according to a report from Coresight CEO Deborah Weinswig. “More broadly, consumer spending has been lifted by a falling unemployment rate, which in April was a historically low 3.9%. Measures of consumer confidence have remained high in recent months, which economists attribute to the recent tax cuts, a healthy labor market and broader economic growth.”

And tax cuts could help mitigate the rise in gas prices this year, according to NRF Chief Economist Jack Kleinhenz.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” Kleinhenz said in a statement emailed to Retail Dive. “And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

But it’s worth looking at just where shoppers are spending the most: As first quarter reports have come in for 39 retail chains tracked by Retail Metrics, retail earnings are up 15.8% year over year, with just four retailers accounting for all that reported growth. Drugstore chains CVS and Walgreens both turned in “sizeable” first quarter surprises that accounted for about 300 basis points of reported earnings growth, according to a Retail Metrics note emailed to Retail Dive. Costco was responsible for another 300 basis points of earnings growth and Home Depot, which reported a 20% year-over-year first quarter operating income boost this week, is responsible for 1,000 basis points.

Without Home Depot, CVS, Walgreens or Costco however, reported Q1 retail earnings fell 0.7%, according to Retail Metrics.

E-commerce continues to outpace in-store sales, according to two indices of U.S. retailers from ProShares, measuring year to date sales through market close on May 14. The Solactive-ProShares Bricks and Mortar Retail Store Index (which includes leading legacy retail companies) fell 3.08%, while the ProShares Online Retail Index (which tracks tracks U.S. and non-U.S. retailers primarily selling online or through other non-store channels with a market capitalization of at least $500 million, including Amazon) rose 19.26%.

Retail Sales Inch Up in April

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The National Retail Federation said that retail sales in April showed a 2.8 percent year-over-year increase in the U.S retail market, excluding auto sales, gasoline stations and restaurants.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” said Jack Kleinhenz, the chief economist for the National Retail Federation, based in Washington, D.C. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

The NRF broke down April results for different retail categories. Results were mixed for apparel stores. Sales for clothing and clothing-accessory stores dipped 0.4 percent in a year-over-year basis. However, April apparel sales were up 1.4 percent compared to the previous month.

Online and other non-store sales were up 12.2 percent in a year-over-year comparison. Compared to the previous month, sales increased 0.6 percent for e-retailers.

Ken Perkins, president of the market-research group Retail Metrics, also posted a recent note saying business was good in April. He said that expectations for the month had been low because cold weather was predicted for much of the U.S. Wall Street analysts also forecast that many consumers may have been suffering from shopping fatigue. The nation’s retailers experienced a spike in business because Easter took place on April 1.

In Perkins’s research note, he discussed the April performance for L Brands, the parent company of Victoria’s Secret and Bath & Body Works. Bath & Body Works reported a 6 percent same-store-sales gain during April. Victoria’s Secret posted a 2 percent decline.

Retail sales show healthy jump in April

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April’s retail sales were 0.4 percent higher compared to March and 2.8 percent higher compared to a year ago.

The sales data, from the National Retail Federation, does not include sales at gas stations, restaurants or auto sales.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” NRF Chief Economist Jack Kleinhenz said in a press release on the data. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

 

May Retail Jobs See Huge Year-Over-Year Increase

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he retail industry employment increased by 28,800 jobs seasonally adjusted in May over April and 100,200 jobs unadjusted year-over-year, the National Retail Federation said Friday. The numbers exclude automobile dealers, gasoline stations and restaurants. Overall, U.S. businesses added 223,000 jobs, the Labor Department said.

“May’s rebound in jobs, together with yesterday’s report of solid income growth and the rise in consumer confidence, points to the economy functioning very well,” NRF Chief Economist Jack Kleinhenz said. “Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending.”

“With the unemployment rate of 3.8 percent at its lowest since April 2000, this shows that many industries, including retail, are hiring and creating jobs at a steady pace. We expect this rate to continue to decline as the fiscal stimulus and tax cuts are further absorbed in the economy,” Kleinhenz said.

May’s numbers followed an upwardly revised combined increase of 19,300 jobs for March and April. The three-month moving average in May showed an increase of 19,000 jobs.

Retail registered monthly gains nearly in all segments with the most robust increases concentrated in three sectors: general merchandise stores, which were up 13,400; clothing and clothing accessory stores, up 6,500 and building and garden supplies, up 6,000. Losses were concentrated in two sectors: health and personal care stores, down 800 jobs and non-store which includes online, down 1,100 jobs.

Economy-wide, average hourly earnings in May increased by 8 cents–2.7 percent–year-over-year.

Kleinhenz noted that retail job numbers reported by the Labor Department do not provide an accurate picture of the industry because they count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centers, call centers and innovation labs.

NRF: Retail Employment Gains

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According to the National Retail Federation, retail industry employment in the U.S. increased by 28,800 jobs seasonally adjusted in May over April and 100,000 jobs unadjusted year-over-year.

The numbers exclude automobile dealers, gasoline stations and restaurants. Overall, U.S. businesses added 223,000 jobs, the NRF said, citing U.S. Labor Department figures.

May’s retail employment follows an upwardly revised combined increase of 19,300 jobs for March and April. The three-month moving average in May increased by 19,000 jobs.

The sectors demonstrating the strongest employment growth were general merchandise stores, up 13,400 jobs; clothing and clothing accessory stores, up 6,500 jobs; and building and garden supplies, up 6,000 jobs. Employment declines occurred in health and personal care stores, down 800 jobs, and non-store including e-commerce, down 1,100 jobs.

“May’s rebound in jobs together with yesterday’s report of solid income growth and the rise in consumer confidence points to the economy functioning very well,” said Jack Kleinhenz, NRF chief economist. “Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending.”

COMMERCIAL DESIGN LEADS RESULTS IN THE LATEST ASID BILLINGS INDEX

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The AMERICAN SOCIETY OF INTERIOR DESIGNERS (ASID) has released its Interior Design Billings Index (IDBI), a statement on the latest trends and BEST PRACTICES in design as well as an indicator of the economic health of the industry. Per the first quarter’s monthly reports, which are gathered from ASID panelists, the latest IDBI shows positive projections for 2018.

Regional performance was one of the larger variations reported in the findings. While the Midwest, West and South witnessed a continued increase, the Northeast region suffered a drop in business—a finding that principal and chief economist Jack Kleinhenz of Kleinhenz & Associates attributes to harsh weather conditions in the region this winter.

Commercial design leads results in the latest ASID Billings Index“As we move further in 2018, that’ll help provide some fuel for maybe some spending in the industry.”

Commercial and institutional design firms experienced an increase in work in the first quarter, while single-family and multifamily residential projects continue to endure a steady decline. Yet, Kleinhenz says, the economy is broadly improving, as recent tax cuts are offering Americans an increased take-home pay.

“It’s certainly an incentive for [people] to make MORE INVESTMENTS in their homes,” says Kleinhenz. “As we move further in 2018, that’ll help provide some fuel for maybe some spending in the industry.”

Following the industry billings report, Susan Chung, director of research for ASID, presented a work assessment of the interior design profession. Members’ responses contributed to the informative results, which revolved around pay, work management and more.

Are you expecting a pay increase this year? The questionnaire asked. More than half of respondents answered positively, with an average increase of 5.2 percent in pay expected in 2018. “Although we do see pay increases happening, we also see that the hours we work are also slightly increasing,” Chung points out.

Nearly half of those surveyed reported working 40 to 50 hours on average per week, and 23 percent claimed to work more than 50 hours. The results showed that those who worked more hours tended to work at larger firms.

The survey also reviewed work-management systems, asking if respondents expected to hire any additional employees this year. Thirty percent of participants claimed to have already made a new hire in the first quarter, while an additional 10 percent of respondents answered affirmatively.

Yet when asked if they’ve made any investments in their firms (i.e., purchasing or billing software, design software, hardware, etc.) during the first quarter, 60 percent of respondents declined.

In the six-month forecast, however, Kleinhenz is hopeful, saying: “It reflects an improving broader economy in general and a positive outlook for the design services industry in the coming months.”

The full report can be found HERE.

May retail sales surge 6% over last year

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Dive Brief:

  • Retail trade sales rose 0.8% in May from April, and 6% percent from May last year, according to the latest monthly report from the U.S. Commerce Department’s census bureau. Excluding automobiles, gasoline stations and restaurants, May retail sales rose 0.7% from April and 5.6% from May last year, according to the National Retail Federation.
  • Most categories are benefiting from the healthy economy. Monthly furniture and home goods sales dropped 2.4% (rising 3.5% year over year) and sporting goods, hobby and bookstore sales dropped 1.1%. (declining 0.7% year over year). But electronics sales rose 0.2% (1.9% year over year), department store sales rose 1.5% (2.1% year over year) and apparel and accessories sales rose 1.3% (5.9%) year over year, the government said.
  • E-commerce sales rose 0.1% from April and 9.1% year over year, according to the federal report.

Dive Insight:

The U.S. economy, underpinned by strong growth and employment, is operating on all cylinders, and that is boosting retail sales and is evident in most earnings reports of late. Increases in household budgets from tax changes and good credit availability are also helping, according to NRF Chief Economist Jack Kleinhenz.

“The economy is looking strong and households have a solid financial foundation on which to base their spending,” he said in a statement this week. “We have seen ongoing momentum over the last several months and believe sales growth should remain healthy and consistent with our 2018 outlook.”

The three-month moving average rose 4.6% over the same period a year ago, topping NRF’s forecast earlier this year that retail sales this year will grow between 3.8% and 4.4%, the organization said.

But while the near-term outlook remains strong, tax reform and the administration’s new tack on trade could undermine all that, according to the International Monetary Fund’s latest report card on the U.S. economy. Tax cuts and spending policies mean the federal deficit will exceed 4.5% of GDP by 2019, and tariffs being imposed and proposed “are likely to be damaging to a range of countries, and to U.S. multinational companies, that are reliant on these supply chains,” the IMF said.

That includes retailers, and Kleinhenz agrees that there’s trouble on the horizon. “[I]nflation and rising oil prices are complicating the picture,” he said. “And new tariffs or a trade war would certainly be negatives that would increase prices and reduce both consumer purchasing power and consumer confidence.”

Retail Dive

Retail Sales Figures

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Retail-sales figures

WASHINGTON

Nonseasonally-adjusted May retail sales increased 5.6 percent year-over-year and seasonally adjusted sales increased 0.7 percent over April, the National Retail Federation announced.

“The economy is looking strong and households have a solid financial foundation on which to base their spending,” said NRF Chief Economist Jack Kleinhenz.

He noted increased take-home pay due in part to tax cuts, low unemployment, and high availability of consumer credit as factors.

“We have seen ongoing momentum over the last several months and believe sales growth should remain health and consistent with our 2018 outlook,” he said. “Nonetheless, inflation and rising oil prices are complicating the picture. And new tariffs or a trade war would certainly be negatives that would increase prices and reduce both consumer purchasing power and consumer confidence.”

Staff/wire reports

Youngstown Vindicator

Retail decline in region is ‘a permanent shift’

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As more people do their shopping online, retailing in Northeast Ohio is changing. And while most brick-and-mortar stores are not in danger of going the way of the dinosaur, in a region where the population isn’t expanding, every online sale has a cost in the malls, in the storefronts and in jobs lost.

By more than one estimate, including by local economist Jack Kleinhenz, the chief economist for the National Retail Federation, online sales now make up 10% of retail sales. Sales, buoyed by rising prices, continue to grow modestly, though accurate regional sales figures are not available.

“The decline in store traffic is not a trend anymore. It’s a shift, a permanent shift,” said Elad Granot, dean of the Dauch College of Business and Economics at Ashland University. “So brick-and-mortar retailers have to figure out what they can offer that Amazon can’t, and it’s getting to be a shorter and shorter list.”

Granot was referring to online retailer Amazon.com‘s move into the grocery business with its purchase of Whole Foods, and its expanding role in logistics. The logistics push includes a growing fleet of cargo airplanes and its fulfillment centers, such as the ones it is building in North Randall and Euclid, on sites of former shopping malls.

Granot said some retail categories are relatively safe. He said, for example, that shopping for makeup can entail trying out different products with an in-store stylist — what he calls an experience. The categories that should be worried about Amazon, he believes, are the categories that have no experience attached to consumption.

“If I need Band-Aids, I’m not going to wait until the next time I’m at CVS, I’m going to order them on Amazon right now,” Granot said, noting that he recently was on a flight of stairs with a student who was ordering a pair of sneakers online as they walked. “CVS provides me with no experience when I shop for Band-Aids.”

According to the Ohio Department of Jobs and Family Services, the retail trade in the seven-county Cleveland metropolitan area lost 8,758 jobs, 5.9% of total jobs in retailing, in the decade between 2006 and 2016. During the same time period, the number of retail establishments dropped 6.5%, a net loss, since new stores keep opening, of 601 establishments.

Much of that loss was in Cuyahoga County as new retail developments sprout up in neighboring counties. Over the decade, the core county lost 5,927 jobs, or 8.6% of its retail jobs, and 464, or 10%, of its retail establishments.

And the decline is continuing, according to preliminary jobs numbers for 2017.

While employment in major Northeast Ohio sectors such as manufacturing, financial services and education and health services held steady or rose, the region continued to lose retail jobs between January 2017 and January 2018, according to the state data.

Regional retail sales are growing, according to Alex Boehnke, manager of public affairs at the Ohio Council of Retail Merchants (OCRM), though regional sales are not well tracked.

The best estimate of the trend in retail sales in Ohio and its metropolitan areas is done by the Economics Center at the University of Cincinnati for OCRM. In November, as the holiday shopping season was beginning, the center estimated that retail sales in the Cleveland metropolitan area for the 2017 holiday season would grow only 3.1%. Sales in the Akron metro were expected to grow only 1.2%. Estimates of national holiday sales growth ranged from 4% to 6%.

“We don’t have the population coming in,” Kleinhenz said. “The pie is not growing.”

CBRE, a national real estate brokerage with a large Cleveland operation, calculates that only two metropolitan areas have more retail square feet per person than Northeast Ohio, where there is 29.9 square feet of retail for every person in the area. In its August 2017 report, “Dead Malls: a boost for retail?,” which is subtitled, “Is retail in Cleveland dying, or is it just overbuilt,” Cleveland-based research analyst Brandon Isner found that only Orlando, with 30.4 square feet per resident (a deceptive figure for a tourist city), and Atlanta, with 30 square feet per resident, top Cleveland.

“It is clear that Cleveland has a supply issue in regard to retail real estate,” Isner wrote. “(W)ithout the population growth that other metro areas have enjoyed, extra retail will weaken what remains.”

In Cuyahoga County, retailers in two mixed-use developments will be opening their doors in the coming months. Opening in the spring, Pinecrest, in Orange Village, has lured several dozen retailers, including Whole Foods, Pottery Barn and Williams Sonoma. In Shaker Heights, the Van Aken District will add about 100,000 square feet of retail space come summer.

Similarly, retail building booms in Avon in Lorain County and in and around the site of the former Geauga Lake amusement park in Geauga County have cost Cuyahoga County retail sales.

“There is no doubt there is a shift going on,” Kleinhenz said. “Are we overstored? In many cases, that is accurate. It’s just that it’s not necessarily that retail is declining broadly.”

Joseph Khouri, a real estate broker with CBRE in Cleveland, agrees with Granot. He, too, believes the retailers who survive will be the ones who sell an experience and activity related retail. He pointed to Toys R Us, which recently announced it was closing all of its stores nationwide after declaring bankruptcy.

“They didn’t differentiate themselves from online sellers,” he said. “People are gravitating toward experiential retail. Specialty food retailers, arts and crafts, home goods products that you have to touch and feel — unique offerings that are hard to mimic online.”

That ability of local retail to be an experience leads Granot to say that he believes local, boutique retailers can also survive.

“Shopping local, especially in Northeast Ohio, is a point of pride,” he said. “There is a lot of room for local retailers to do well, as long as they offer an additional benefit beyond the actual product and price, because it’s going to be increasingly harder to beat Amazon.”

Jay Miller

Crain’s Cleveland