As retail chains gear up to report Comparative Store sales on Thursday, many analysts predict May’s numbers to be up 3.8 percent, compared to a 4.8 percent decrease last year, according to Thomson Reuters. Standard & Poor’s expects there to be a 3.4 percent increase. The International Council of Shopping Centers (ICSC) cut back its May predictions, now expecting an increase of 2 to 2.5 percent, down from their previous forecast of 3.5 percent. They cited slower traffic and less spending because of the colder weather during the month.
U.S. consumers are starting to open the purse strings for nonessential items such as clothes and furniture after focusing on the basics during the recession, but shoppers are being very selective about where and when they spend. Overall consumer sentiment has remained the same since February. “Overall, we’re still going to see improvements for all of retail, but the volatility just shows we’re not out of the woods yet,” said Linda Tsai, specialty retail apparel senior analyst for research and trading firm MKM Partners. “I don’t think it signals doom, but right now it’s just a little bit slower,” she added. “We’re still seeing dips during non-peak periods.”
S&P apparel retail analyst Marie Driscoll agreed that consumers are still very wary of the recovery. “It looks like the economy is improving in fits and starts,” Driscoll said. “A real thing that could derail consumer spending is too much volatility in the stock market. Other than that, it seems to be leveling out and increasing modestly.”
With the Memorial Day holiday on the last weekend of May, it pushed more sales into June, and kept May at more single digit sales, said analysts. Also, cooler weather throughout the nation hurt sales of summer wear.
June looks like a great month with “glorious” weather expected everywhere but the Southeast, said Scott Bernhardt, Chief Operating Officer for Planalytics, which provides weather data for businesses. “June is going to be off the charts good for most of North America,” he said. “It will feel like summer. People will spend like summer. It’s a very good thing for the economy.”