Home sales drive Redbook avg. up

Don Hogsett, February 4, 2002

With home-related goods still hitting a home run, and stores clearing out excess inventory in a post-holiday mode, same-store retail sales improved modestly during the third week of January and remained somewhat ahead of plan, according to the Redbook Retail Sales Average.

Sales for a broad cross-section of American retailers advanced by 1.5 percent over year-before levels, slightly ahead of the 1.4 percent increase recorded the prior week.

Home-related goods "continue to be driven by a strong housing market, and several retailers again reported last week that it was a standout," said Redbook analyst Catlin Levis.

For the three weeks month-to-date, the Redbook Average, lifted by continued strength at discounters, climbed by 1.6 percent, modestly ahead of a targeted gain of 1.5 percent. Predictably and routinely, all of the gains came out of the nation's mass merchants, up 4.9 percent, while department stores continued to lag, sales dropping off by 3.6 percent, failing even to hit the target of a 2.7 percent decline.

"Retailers said this intra-month volatility was to be expected in January, with its focus on inventory clearance and was of limited value in identifying fundamentals," said Redbook analyst Catlin Levis.

In a period of seasonal transition, "Retailers are preparing to move in spring merchandise this month," said Levis. "Some stores are transitioning more gradually than usual, given the increasing unwillingness of shoppers to buy ahead of need trend." This, Levis cautioned, "may mean a slow start to the spring season."

For many retailers, Levis noted, "seasonal areas like apparel and softlines have lagged nonseasonal categories, including consumer staples, durables and home-related goods."

Taking a look at the map, the Northeast was the best-performing region during the week, Levis noted.

Redbook Retail Sales Average
Third week of January

Week ended 1/12 1/19 1/26 2/2 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department Stores* -2.8 -4.0 -3.9 -3.6 -2.7
Discounters 4.9 4.8 5.0 4.9 4.2
Redbook Average 1.9 1.4 1.5 1.6 1.5

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