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March Same-Store Sales Exceed Expectations

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March same-store sales came in stronger than expected, helping the industry avoid its first year-over-year decline in comparable sales since 2009. Estimates varied, but same-store sales for the roughly 30 retailers that report the figure came in between 2.0 percent and 2.5 percent higher than March 2010.

The figure exceeded analysts' expectations.

Many thought that the Easter shift was going to take a bigger bite out of the month's figures. Analysts were expecting a 0.7 percent decline. Last March was extremely strong because of an early Easter. In contrast, the holiday this year is 20 days later, pushing more Easter-related sales into April rather than March.

Despite the numbers, as I've written in other monthly roundups of late, it's important that we remember that the pool of retailers that still report same-store sales numbers is considerably smaller than it once was. Less than 30 retailers that use the metric (down from more than 70 a few years ago). Wal-Mart stores, which singlehandedly accounts for something like 5 percent to 6 percent of the overall retail pie, only reports quarterly figures today. And it has reported comparable store sales declines for seven straight quarters. Were they still in the monthly matrix, the figures would look quite a bit different.

My look inside the monthly reports is after the jump.

Kantar Retail and Retail Sails recorded a 2.5 percent gain, while ICSC estimated that sales rose 2.0 percent.

ICSC's tally shows that same-store sales rose 2.0 percent in March.

ICSC's numbers are based on 28 retailers.

Here are ICSC's monthly same-store sales year-over-year changes, not seasonally adjusted, going back to 1993.

Click to enlarge.

icsc_march_2011_same_store_sales

Here is ICSC's index of same-store sales, seasonally adjusted, going back to 1992.

Click to enlarge.

icsc_march_2011_same_store_index

According to Kantar Retail, sales-weighted same-store sales increased 2.5 percent in March for the 28 retailers that reported numbers (most of which were apparel retailers). (A pdf with each retailer's results can be downloaded here.) The results were led by stronger-than-average results at food, drug and mass retailers, where fuel and food price inflation is focused. Lagging were department stores followed by apparel and accessory stores.

Frank Badillo, senior economist at Retail Forward, said in a statement, “What's encouraging is that the Easter-related letup in sales wasn't as severe as expected by a number of retailers—especially in light of the additional drag of higher fuel prices. Sustained growth in jobs and income may be helping to alleviate some of the pain.”

Here are two figures from Kantar's Retail ShopperScape Survey.

kantar_march_chart_1

kantar_march_chart_2

Blog RetailSails measured a 2.5 percent gain, looking at 27 retailers.

Here is one chart from RetailSails' post:

retail_sails_march2011

Despite low expectations from analysts, most retailers reported relatively strong results in March, as improvements in the employment picture and consumers' personal finances offset worries about surging food and gas prices. Retailers were up against extremely tough comparisons to last March since Easter falls three weeks later this year, but were still able to surpass muted expectations and overall same-store sales increased for the 19th consecutive month.

Total sales for the 27 retailers we track increased 4.0% from a year ago to $37.3 billion in March, while same-store sales rose 2.5% on top of a 9.2% gain last year – this was the 19th straight gain after 12 consecutive months of declines. For the first three months of 2011, total sales rose 5.8% to $95.4 billion and same-store sales increased 3.8% after a 5.8% rise in the prior-year period.

Only 13 out of the 27 retailers posted comparable sales gains for the month, compared to 24 of 27 last March. However, looks are deceiving as many who reported declines in March expect double-digit gains in April due to the calendar shift. Top performers this month were Limited Brands (+14% comp) as its Victoria's Secret chain saw comps up 19%, luxury names including Saks (+11.1%) and Neiman Marcus (+8.8%), Zumiez (+8.9%) and Costco (+13%), while laggards included Kohl's (-6.5%), Target (-5.5%), The Gap (-10%) and Cato (-9%).

While retailers have so far been able to keep the post-holiday momentum alive, the remainder of the year will be a challenge. Raw material, labor and transportations costs are all rising rapidly and companies will struggle to hold onto recent margin gains.

Because of the calendar shift and weather-related issues, the combined March-April results will be a much better barometer of performance. On this basis, total sales for the period increased 7.8% in 2010 and same-store sales rose 5.8% after a 3.4% decline in 2009.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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