Econintersect: Wind, sleet, hail, rain and snow did not dampen the post holiday buying mood. Data provided by Bank of Tokyo-Mitsubishi UFJ (BTMU) for same store sales for January 2011 shows a year-over-year rise of 4.2%.
Same-store sales in January surprised to the upside, rising by +4.2 percent on a year-over-year basis, based on BTMU’s tally of over 30 chain-store retailers representing nearly $30 billion in total sales. Despite the U.S. experiencing the snowiest January in six years, very few retailers attributed sales weakness to weather. Instead, many retailers came off the stronger-than-expected holiday shopping season with little inventories for markdowns, which hampered bargain hunter shopping.
With inventories under much better control, however, retail margins were not pressured as had been the case since Holiday 2007. Some retail standouts were The Limited, which reported an incredible jump in same-store sales of +24 percent, drugstore Walgreen’s, which experienced a hefty gain of +6.1 percent mostly due to strong front-end sales, and Zumiez, the teen retailer with an increase of +15.3 percent. Once again luxury spending greatly outpaced low-end stores, which is a good sign for the economic recovery, but still shows that spending isn’t strong across all income groups.
Higher gas prices haven’t yet cut into consumer spending and were responsible for 0.5 percentage points of January’s gain in same-store sales. If gas prices continue to rise, however, consumers will begin paring back purchases elsewhere. Average retail gas prices were $3.15/gallon in January 2011 compared to $2.77/gallon in January 2010.