INDUSTRY BUZZ: Is Retail's Glass Half Full in 2010? - RetailWire

RetailWire cites a recent Thomson Reuters report as evidence that a month of strong spending in March by consumers is a good indicator that "things are looking up" for the retail industry. This indicates that in the US, and in North America, it's a good bet that consumer spending won't decrease as it did in the fall of 2008.

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Is Retail's Glass Half Full in 2010?

On the heels of an exceptionally strong March, many could not be blamed if they were secretly hoping for a blowout April even if most economists predicted sales would be muted; perhaps even down a bit. Now that the numbers are in -- chains were up slightly for the month -- most are looking at the combination of March and April as an encouraging sign that consumer spending will not suddenly dry up as it did when the financial crisis hit home in the Fall of 2008.

According to Thomson Reuters, sales at 28 major retail chains were up 0.5 percent versus the same period last year. This followed a 9.1 percent year-over-year increase in March. Taken together, sales during March and April were up 4.8 percent over 2009.

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

The International Council of Shopping Centers' (ICSC) Index of 30 retailers had sales up 0.8 percent this year compared to a 2.7 percent drop last April. For March, the ICSC had retailers achieving a nine percent gain, the strongest year-over-year gain since 1999. The combined numbers for March and April were up 4.9 percent in the ICSC Index, well above the 4.1 percent increase retailers have been tracking since January.

Beyond revenues, many are most encouraged by the fact that retailers are driving much of these same-store gains without having to revert to extreme discounting.

"The real takeaway is that profitability continued to improve on the healthy underlying demand," Michael Niemira, chief economist at ICSC, told The Associated Press.

SOURCE: RetailWire