Retail Sales Keep Falling in March, Cementing Slow First Quarter
New government data showed retail sales fell farther in March, even as prices dropped.
Retail sales in the U.S. fell again in March, reinforcing results from a number of brands that have recently noted a slower-than-expected start to the year.
Seasonally adjusted sales for clothing and accessories retailers in March fell another 0.3 percent to $21.2 billion from an amended 1 percent drop to $21.7 billion in February, according to new Census Bureau data.
Sales in the sector have fallen a total of 2.6 percent since January and brands such as Lululemon Athletica Inc. have already warned of 2017’s “slow start” in the run up to first quarter financial releases while store closures are already on track to beat levels not seen since the height of the Great Recession.
The government initially reported last month a slight rise in overall retail sales for February, but further data adjustments revealed sales actually dropped 0.3 percent. Seasonally adjusted retail sales overall declined another 0.2 percent in March to $470.8 billion.
E-commerce sales, however, edged up again during the month, growing to $49.9 billion from $49.6 billion in February, representing a 0.6 percent increase. Over the first three months of 2017, e-commerce sales have grown by about 11 percent.
Apparel sales are still a little better than they were a year ago. March sales for clothing and accessories retailers are up about 0.3 percent compared to 2016 and retail sales in general grew by 4.9 percent, compared to the same month last year.
Commenting on the slight year-over-year increase, Jack Kleinhenz, chief economist for the National Retail Federation, said “various factors were at play” that dampened results for the first quarter.
“We are again seeing a pattern similar to previous years — consumer spending was weak but is expected to pick up as we move through the year,” Kleinhenz added.
Despite consumers spending more money overall and employment rates holding steady, department stores are still struggling, with sales of $12.6 billion during March, essentially flat from February but representing a roughly 5 percent drop from a year ago.
The adjusted cost of apparel dropped for the first time in March, falling by 0.7 percent from a year ago, according to new federal data.
This purported “lack of pricing power” is a “plague on the retail industry,” according to Kleinhenz.
“There is no doubt that weak pricing power led to the bumpy period for retailers in the first part of this year,” he said.