Overall Retail Sales Hit New Record

by Beth Gaston Moon | March 13, 2012 11:45 am

Busy shopping mall [1]Mild weather, falling unemployment and improved consumer confidence helped lift retail sales by 1.1% in February, to a new record high of $407.8 billion[2]. The increase was the largest since September[3] and edged ahead of consensus expectations for a 1.0% rise.

January numbers, meanwhile, were adjusted higher as well. The new reading reflects sales growth of 0.6%, up from the previously reported 0.4% expansion.

Despite the fact that the average price for a gallon of gas rose by 20 cents in February, vehicle sales were a particular pocket of strength, rising 1.6% in the month. In fact, it was the best sales month in four years[4] for U.S. automakers. Excluding autos, retail sales grew by 0.9%.

Fashion Forward

Apparel retailers were also strong during February, collectively posting a sales gain of 1.8%, or the largest monthly increase since November 2010. Not only did a mild winter lure consumers out of their homes and into the malls, but it forced retailers to offer more attractive promotions on leftover winter clothing. Chains such as Gap (NYSE:GPS[5]), Buckle (NYSE:BKE[6]) and The Limited (NYSE:LTD[7]) had previously announced strong same-store sales for February[8], so overall sales growth in the sector wasn’t a huge surprise.

The “core” sales numbers, which exclude auto, fuel and building-material sales, grew by 0.5% during the month after a 1.0% move higher in January. Core retail sales more closely align with the consumer-spending data point within gross domestic product (GDP).

Seeing More Green?

This growing sales trend could continue this month, in part because St. Patrick’s Day proper falls on a Saturday this year. More than half of the Americans surveyed by the National Retail Federation say they will celebrate the holiday this year[9] by shopping for green gear and hitting the pub for a pint or three.

Americans expect to spend around $35 each, with 82% on the hunt for themed apparel and 30% expecting to go to a restaurant. (How are corned-beef futures looking these days?) What’s more, 24% of those surveyed expect to spend some money on decorations for their home or office. Next comes Easter Sunday (April 8), for which consumers plan to shell out $135 apiece (on average), and some of this spending may occur in March.    

The Retail HOLDRS ETF (NYSE:RTH[10]) is up a fraction in morning trading today. Some of the outperforming names in the sector so for this session include Pacific Sunwear (NASDAQ:PSUN[11]) — which reports earnings after today’s close — Lowe’s (NYSE:LOW[12]), Barnes & Noble (NYSE:BKS[13]) and Office Depot (NYSE:ODP[14]).

As of this writing, Beth Gaston Moon does not own any shares mentioned here.

  1. [Image]: http://investorplace.com/wp-content/uploads/2012/03/Shopping.jpg
  2. new record high of $407.8 billion: http://www.usatoday.com/money/economy/story/2012-03-13/retail-sales-february/53507326/1?csp=34money&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UsatodaycomMoney-TopStories+%28Money+-+Top+Stories%29
  3. was the largest since September: http://www.cnbc.com//id/46716410
  4. best sales month in four years: http://www.usatoday.com/money/economy/story/2012-03-13/retail-sales-february/53507326/1?csp=34money&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UsatodaycomMoney-TopStories+%28Money+-+Top+Stories%29
  5. GPS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GPS
  6. BKE: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKE
  7. LTD: http://studio-5.financialcontent.com/investplace/quote?Symbol=LTD
  8. had previously announced strong same-store sales for February: http://investorplace.com/2012/03/retailing-same-store-sales-see-wide-gains/
  9. they will celebrate the holiday this year: http://www.usatoday.com/money/industries/retail/story/2012-03-12/st-patricks-day-saturday/53499126/1?
  10. RTH: http://studio-5.financialcontent.com/investplace/quote?Symbol=RTH
  11. PSUN: http://studio-5.financialcontent.com/investplace/quote?Symbol=PSUN
  12. LOW: http://studio-5.financialcontent.com/investplace/quote?Symbol=LOW
  13. BKS: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKS
  14. ODP: http://studio-5.financialcontent.com/investplace/quote?Symbol=ODP

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