As expected, same-store sales crashed back to earth in April following March’s out of this world results.
Weak year-over-year comparisons, pent-up demand and the “Easter shift” made March the best month for retailers in about a decade. But April was not as kind.
The researchers crunching the numbers found that same-store sales rose by about 1.0 percent for the month. That puts the combined March/April figure at about 4.5 to 5.0 percent. The weak April results were the direct result of the Easter boom the previous month. March got all the benefit of Easter-driven sales. Moreover, the run of spending spurred on by pent-up demand that went on during the early months of the year may have run its course. Many consumers have now returned to their frugal ways. And is it that big a surprise really? The jobs picture remains bleak. Consumer credit is less available and the housing market remains in shambles. Those were three major factors driving consumer spending during the boom year. Without robust recoveries, there will be no sustained consumer spending binge.
“We know that things probably are not going to get worse, but the consumer is not out there leading us forward,” said Stephen Hoch, a marketing professor at Wharton School.
The results came a week after data showed that the U.S. economy expanded at a 3.2 percent annual rate in the first quarter, the fastest pace of consumer spending in three years.
But that translated into mixed results for U.S. businesses, as people are more selective about where they spend, analysts say. In addition, a fresh report on jobless claims showed a slightly smaller-than-expected drop in unemployment filings, suggesting a more gradual recovery.
“Nobody has told American consumers that the recession is over although some officials have rosy predictions of growing consumer spending,” consumer trend expert Britt Beemer said in a note. “We’re seeing a lot of people on the edge of financial distress.”
Retail Forward recorded the year over year gain as 1.2 percent. ICSC and Retail Metrics said sales rose 0.8 percent compared with April of last year.
ICSC’s tally shows that same-store sales rose 0.8 percent in April. Read the rest of this entry »
What Will it Take for the Gap to Turn Around its Namesake Brand?
by Elaine Misonzhnik May 6th, 2010
In the past few years, even before the recession began, the Gap, one of the staple tenants at U.S. regional malls, has been experiencing waning popularity. Part of the problem might have been oversaturation, but another big factor seemed to be poor merchandise selection. With the entrance of new management and design teams, however, the retailer has done a pretty good job turning around its Old Navy and Banana Republic brands. Old Navy stores, in particular, have been projecting a whole new level of energy recently, with big crowds drawn in by a wide selection of cheap, colorful clothes and an expanded choice of accessories.
The Gap stores, however, still lag behind, according to a story in The Wall Street Journal. The 27-year-old customer interviewed in the article hits the nail on the head when she notes that too many of the clothes the Gap sells fit into a very conservative color scheme and there aren’t enough dresses and skirts. But I also think the Gap’s clothes are overpriced for what they are, a definite misstep in this market. Does anyone agree? And can Gap afford to knock about $10 to $15 off its merchandise?
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