Consumer Confidence Lowest Since 2002
Washington, D.C. Confidence in the economy dropped to a new low as worries about a possible recession, persistent problems in the housing and credit markets and lofty energy prices put people in more gloomy mind-sets.
According to the RBC Cash Index, confidence sank to a mark of 33.1 in early March, down from 48.5 in February. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in February.
The big worry is that consumers will cut back sharply on their spending, throwing the economy into a tailspin.
However, the nation’s retailers that reported sales results on Thursday did get a bit of a reprieve. Shoppers cautiously returned to malls, after retrenching in recent months. Among the big winners: discounters such as Wal-Mart Stores, whose results beat expectations.
Still, as retailers reported mixed February sales results, it was clear that shoppers weren’t splurging but rather focused on necessities, like groceries and low prices. Among the weakest performers were apparel stores such as Gap, Limited Brands and J.C. Penney.
JCPenney reports Feb. comps drop
PLANO, Texas JCPenney today reported that comparable-store sales decreased 6.7% for the four weeks ended March 1, compared with guidance for a low-single digit decrease. In last year’s February period, comparable-store sales increased 1.5%. Total sales in February decreased 4.4%.
JCPenney said that women’s and children’s apparel and family footwear were the best performing merchandise divisions for the February period. The company also commented that its new American Living concept has “enjoyed a good initial customer response.” Home categories and the Southeast region continue to experience the softest results, the company reported.
JCPenney said it expects a low-single digit increase in March comparable-store sales. This is compared to an 11% increase in last year’s period. Total sales for the March period are expected to be about flat.
Target meets Feb. comps goals
MINNEAPOLIS Target today reported that its net retail sales for the four weeks ended March 1 increased 5.9% to $4.4 billion from $4.1 billion for the four weeks ended March 3, 2007. On this same basis, February comparable-store sales increased 0.5%.
“Our comparable store sales performance in February was in line with our planned range,” said Bob Ulrich, chairman and chief executive officer of Target.
Target had called for February comps to be down 1% to up 1%.