Retail Sales Up Slightly In February
Written by Ken Gaebler
NRF reports modest monthly retail growth in February as consumers adjust spending habits to payroll tax increase and other factors.
Many retailers saw the expiration of the payroll tax holiday as a harbinger of a tough year for retail. Faced with less discretionary income, consumers were expected to scale back their spending during the early months of 2013, leaving retailers wondering how to create customer enthusiasm among cash-strapped shoppers.
But a recent report by the National Retail Federation (NRF) showed that consumers have outperformed expectations and delivered modest retail sales growth during the month of February. According to the NRF, retail sales (excluding automobiles, gas stations and restaurants) posted a 0.7 percent monthly increase in February and a 0.5 percent year-over-year gain.
When food service, auto sales and gasoline are added back into February sales totals, U.S. Department of Commerce statistics showed a 1.1 percent seasonally adjusted month-to-month increase and a 4.6 percent adjusted year-over-year increase.
"Consumers, once again, exceeded economists' expectations and estimates in February," NRF Chief Economist Jack Kleinhenz said. "It may be too early to measure the impact of the payroll tax hike and higher gasoline prices on consumer spending. However, this portends a good, but not great, first quarter for retailers as consumers continue to breathe life into the economy."
Additional highlights from the February retail sales report include:
- Clothing and clothing accessories stores' sales increased 0.2 percent seasonally-adjusted month-to-month and increased 0.4 percent unadjusted year-over-year.
- Health and personal care stores' sales were flat seasonally-adjusted month-to-month and decreased 2.9 percent unadjusted year-over-year.
- Nonstore retailers' sales increased 1.6 percent seasonally-adjusted month-to-month and increased 11.6 percent unadjusted year-over-year.
- Electronics and appliance stores' sales decreased 0.2 percent seasonally-adjusted month-to-month and decreased 3.2 percent unadjusted year-over-year.
- Sporting goods, hobby, book and music stores' sales decreased 0.9 percent seasonally-adjusted month-to-month and increased 0.6 percent unadjusted year-over-year.
"Retail continues to show its importance to the economy," NRF President and CEO Matthew Shay said. "That said, our consumer research consistently shows a cautious shopper that is making tough spending decisions based upon economic uncertainties, lower paychecks and higher prices for things such as gas. This is particularly true among those making $50,000 or less a year."
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