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NEW YORK — May saw retail sales rebound more strongly than expected, despite unseasonable weather in many areas of the country.
May saw retail sales rebound more strongly than expected, despite unseasonable weather in many areas of the country.
"Stronger employment data and increasing home and equity prices lifted confidence and spending this spring," said Jack Kleinhenz, chief economist for the National Retail Federation (NRF). "The economy is improving, albeit slowly, but we still have a long way to go."
The NRF calculates that retail sales (excluding automobiles, gas stations and restaurants) rose 4.8% year over year. Department of Commerce figures, which include autos, gas stations and restaurants, show sales up 4.3% over May 2012.
Leading the way in core retail sectors were building material and garden equipment stores, which saw revenue up 9.3%. Apparel and accessory outlets followed with a 4.8% increase.
General merchandise retailers turned in a 2.3% year-over-year gain, while the top line for health and personal care stores improved 0.5%. Furniture and home furnishing stores reported a meager 0.1% uptick, while electronics and appliance stores suffered a 0.2% dip in sales.
Among mass market retailers, Costco Wholesale Corp. recorded a 7.4% rise in net sales to $8.13 billion, while comparable-store sales rose 5%, short of the 5.5% projected by analysts surveyed by Thomson Reuters. Domestic warehouses turned in a 5% increase both with and without fuel sales, while international units saw sales grow 6% including exchange rate fluctuations. At constant exchange rates, sales of international warehouses gained 7%, while total comp-store sales advanced 6%.
Total May sales at Memphis-based regional discounter Fred’s Inc. inched up 0.2% to $152.4 million, while comp-store sales dipped 0.5% compared with a 1.3% increase a year ago, better than the 0.8% decline expected by analysts. Year-to-date comp-store sales for the 715-store chain are down 1.1%.
"Unseasonable cool and wet weather in May continued to have a negative impact on lawn and garden merchandise, summer toys, and other seasonal departments," explained Bruce Efird, chief executive officer. "Additionally, the sales impact of the ongoing brand-to-generic conversion in the pharmacy department more than offset continued growth in script counts. We estimate that this shift reduced total and comparable-store sales for the month by approximately 200 basis points."
Generic introductions also impacted pharmacy results for Walgreen Co., but the drug store chain’s 2.8% overall increase in comp-store sales handily beat the 1.8% growth projected by analysts. Pharmacy comp-store sales improved 3.8%, ahead of a 1.2% rise at the front end.
Generics had a sharp impact on same-store sales at Rite Aid Corp., shaving 373 basis points from pharmacy same-store results, which fell 2.7%. That drop more than offset a 0.8% increase at the front end, resulting in an overall 1.5% same-store decrease.
