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Strong April is retailers’ Easter present
NEW YORK (AP) — Retailers reported surging April sales that were helped by a late Easter, extending strong spending momentum since late last year.
However, some stores that cater to low-income shoppers are starting to warn that their customers are facing increasing pressure from high gas prices.
As merchants report their results Thursday, a diverse group including Costco Wholesale Corp., Victoria's Secret’s parent company and teen retailer the Buckle posted soaring revenue and beat Wall Street expectations.
“The Easter bunny delivered the goods. It showed that the consumer was resilient and sales were better than expected despite some growing headwinds,” said Ken Perkins, president of RetailMetrics LLC, a research firm. But he added, “We are beginning to see the leading edge of consumers starting to pull back.”
Target Corp. reported a gain below internal expectations and said its shoppers face increasing pressure on their household budgets.
Last week, Mike Duke, CEO of Wal-MartStores Inc., said the company already is seeing higher gas prices having an impact on shoppers, who are cutting back on discretionary items as their spending power erodes. He said Wal-Mart is seeing its customers consolidate shopping trips, though they’re spending more on each excursion.
The world’s largest retailer no longer reports monthly revenue figures.
Overall, revenue at major retailers soared a better-than-expected 8.5 percent last month over April 2010, according to the International Council of Shopping Centers.
The figures are based on stores open at least a year. That is considered a key indicator of a retailer’s health because it excludes results from stores opened or closed during the year.
The increase is not as robust as it looks because Easter fell on April 24 this year, three weeks later than last year. That inflated the figure by anywhere from 3 to 5 percentage points, hurting March by the same amount. March sales rose 2 percent.
April’s increase marked the biggest gain since March 2010, when the index rose 9 percent, helped by a similar Easter quirk.
Analysts study the two months combined to give an accurate reading of consumer spending for what retailers call the spring season. In May, merchants start shipping summer goods to stores.
For the March-April months combined, retailers delivered a 5.25 percent increase, marking the strongest spring period since 1999, when it was rose 6.2 percent.
Michael P. Niemira, chief economist at the ICSC, said, however, that he saw some moderation in spending, based on his study of month-to-month seasonally adjusted figures. By his calculation, from March to April, revenue at stores open at least a year rose 0.3 percent, compared with a 2.2 percent increase from February to March.
By Brahma Chellaney
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