World Business

US April retail sales pause slightly from March's run

(Agencies)
Updated: 2010-05-07 15:59

The US's retail recovery continued in April, albeit at a more sluggish pace than in recent months.

Sales at major chain stores increased 0.5 percent compared with the same month a year earlier, according to Thomson Reuters' tally of 28 retailers. That was below the 1.7 percent increase that analysts had projected.

An earlier Easter this year and poor weather in some parts of the country led to weaker sales than in March, when retail sales soared 9.1 percent.

Because of the Easter shift, industry experts said that it was important to look at the combined March-April period. For the two months together, sales rose a healthy 4.8 percent, Thomson Reuters said.

For example, Target Corp suffered a 5.9 percent drop in April, but for the combined March-April period, its sales were up 3 percent, its strongest performance in two years.

The figures are based on revenue at stores open at least a year and are considered a key indicator of a retailer's health because they exclude growth at stores that open or close during the year.

The strongest April performers included Costco Wholesale Corp, which posted an 11 percent gain; Nordstrom Inc, where sales rose 7.5 percent; and off-price retailer TJX Cos., parent to the T.J. Maxx and Marshalls chains, with a 4 percent increase.

Shopping centers and retailers say they're encouraged by the steady return of many consumers.

"Things are definitely looking up," said Randy Brant, head of real estate for department stores at mall operator Macerich Co "More retailers are talking about expansion again, and consumer confidence is up. Sales and traffic are starting to pick up in all our centers."

After the spending spree in March, "April is the pause that refreshes," said Lazard Capital Markets analyst Todd Slater. "The consumer is out of hibernation."

Still, Slater and others say the recovery will continue to be tentative as long as high unemployment persists.

Teen-oriented retailers continue to suffer, reporting drops in April as young consumers keep cutting back their spending.

"Parents don't have the money to support their [children's] spending habits," said Laura Gurski, partner and leader of the North American consumer and retail practice at A.T. Kearney. Teen merchants could face a difficult summer as job opportunities for teens will likely be slim.

Among those suffering last month were teen chain Hot Topic, where sales fell 12.5 percent, and upscale teen retailer Abercrombie & Fitch Co, which had seen sales rebound during the past few months but said sales fell 7 percent in April.