Consumers fled shopping centers and chain stores last month in favor of discounters as the weakening economy weighed on their minds and shrank their discretionary income.
High gas prices, economic worries and an early, cold Easter combined to produce the weakest March sales report in more than a decade.
Shoppers stuck to the essentials. Grocery, discounters and wholesale clubs such as Wal-Mart Stores Inc., BJs Wholesale and Costco fared well. But department stores, specialty and apparel retailers such as Abercrombie & Fitch, Limited, JCPenney, Nordstrom and Kohl’s reported a drastic decline in sales compared to last year.
“The reality is that shoppers are stepping up their plans to cut back spending,” said Frank Badillo, senior economist at TNS Retail Forward, a Columbus, Ohio, research group.
March sales fell a collective 0.5 percent compared to the same month last year, according to a composite compiled by the International Council of Shopping Centers, a New York trade group that measures monthly sales. It was the weakest March since 1995.
“Due to the Easter shift and weak economic conditions, the retail industry faced a difficult sales environment in March,” said Michael P. Niemira, chief economist and director of research at the ICSC.
Weather and Easter the earliest the Christian holiday has fallen in nearly a century played a role as retailers struggled with deciding between putting out spring clothes for Easter and holding out for warmer weather later in the season. Consumers typically don’t buy spring clothes or products until it actually feels like spring outside.
But the weather was unseasonably cool in much of the country last month.
“The driver of what triggers consumers to start spending for their spring wardrobe and lawn and garden needs is the weather,” said Paul Walsh, a former meteorologist and chief strategy officer at Storm Exchange Inc., a New York weather risk management group.
He expects sales to start to rebound this month as the weather gets warmer.
Retail analysts, however, say that while warm weather-inspired sales will help, shoppers will continue to spend cautiously.
“Record high gasoline prices and consumers’ worry about the economy will continue to curb discretionary spending power,” Mr. Niemira said.
A TNS Retail Forward survey asked shoppers how they plan to spend money in March compared to the previous March. Twenty percent of shoppers said they plan to spend “much less.” When they were asked the same question in February, only 9 percent said that.
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