U.S. monthly retail sales reversed a 3-month trend of negative MoM results during the month of March as reported yesterday. Sales at U.S. retailers rose 0.6% in March, the Commerce Department reported Monday. An Easter holiday that fell on the last weekend of the month helped to drive more traffic into stores, though a bout of bad weather last month hurt some retailers such as home centers and clothing stores. When stripping out autos and gasoline, sales rose to a lesser degree at .3 percent. February’s retail sales were left unchanged, but the drop in January was revised to show a 0.2% decrease instead of 0.1 percent.

When we review the breakdown (above) of the categories in the report it was clear that auto dealers posted their best month since last September. Sales rose 2 in March. Internet retailers, pharmacies and stores that sell home furnishings were other big winners. In terms of some of the worse performing categories, home centers, apparel outlets and department stores saw a drop in sales. Unseasonably poor weather during most of the month was likely the culprit for the lack of spending in the categories. Sporting goods, hobby and music had the worst year-over-year results with a drop of 3.3 percent.

In total and on a year-over-year basis, retail sales rose some 4.5% in the month of March, the strongest YOY performance thus far in 2018. What was most disappointing to Finom Group in the latest retail sales report was that department store retail sales reversed a trend of positive YOY sales results. As reported, department store sales declined .9% YOY after having strong performances dating back to November 2017. This is something that investors should keep an eye on going forward, especially since Non-store retail sales grew during the month of March by nearly 10 percent.   Non-store retailers are online and/or digital retailers.

Ahead of this latest monthly retail sales report, Finom Group believed the previous monthly reports in 2018 set up the March report to be stronger than expected. Delayed tax returns and unseasonable weather likely played a large role in the January and February monthly retail sales declines. To a somewhat lesser degree, consumers were also repairing their credit card debt from the holiday season in the first two months of the year. March was likely going to prove a strong bounce back in consumer spending and proved to be just that. Moreover, Finom Group posted notes from the culled data of Bank of America’s credit cards, debit cards and customer accounts.

Print Friendly, PDF & Email