New York City January sales at many top U.S. retail chains moved into positive territory from last year's decline as many merchants avoided drastic clearance sales and shoppers redeemed holiday gift cards. Same-store sales in January rose 3.3% based on a tally of 29 retailers compiled by Thomson Reuters, better than the 2.5% analysts had expected. Sales rose in all categories except drug stores, which posted a 1.4% drop.
The results, led by stronger-than-average results at apparel and accessory stores followed by department stores, mark a rebound from a year ago, when sales fell 5.7%, and follow a bigger-than-expected 2.9% increase in December.
“The modest pickup in retail spending is persisting despite challenges ranging from income constraints to bad weather,” said Frank Badillo, senior economist at Retail Forward, a Kantar Retail Co. “The recovery should continue on an uneven path as shoppers slowly resume spending that was postponed or reduced during the recession as a precaution.”
However, some experts cautioned that the positive momentum will be hard to maintain if unemployment remains high.
"The industry is still low and slow," said Brian Girouard, leader of Capgemini's global consumer products and retail sector, in a Reuters report. "Consumers are spending lower than they were two years ago, and the recovery is quite slow.”
Many chains beat Wall Street estimates and raised their earnings forecasts including Macy's, American Eagle Outfitters, TJX Cos., and Bon-Ton Stores. But Target Corp. posted disappointing sales and said it was prepared for a challenging environment in 2010.