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Hernando Today

Retail Better In February

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By TONY HOLT

Hernando Today

Published: March 7, 2009

NEW YORK - Florida might have a soaring unemployment rate and large store chains might be liquidating or shutting down, but the national trends have been encouraging to some retail analysts.

The rate of decline during the previous three months has noticeably decreased.

In February, U.S. chain store sales were off by 0.1 percent on a year-over-year basis.

"The rate of decline has moderated," said Michael Niemira, an economist with the International Council of Shopping Centers. "We've seen that very explicitly in these past couple months."

Predictably, Wal-Mart has kept the retail sector solvent since the start of the recession. Discount stores performed the best in 2008.

The year-to-year changes each month from November 2008 through February have been -0.1, -1.6, -2.0 and -2.7 percent.

If Wal-Mart was dropped from the formula, those numbers would have been -4.3, -4.8, -4.6 and -7.7, according to ICSC.

Even still, many of the 35 retail-chain stores compiled by ICSC have been encouraged by the latest numbers.

Retail analysts have predicted a "slower-than-average growth" by September, even while other facets of the economy don't show any signs of improvement until much later.

Kohl's, which has a location along Spring Hill Drive, east of the Suncoast Parkway, posted a total sales increase of 3.6 percent for February.

"February's sales results exceeded our expectations as regular price selling offset significantly lower levels of clearance sales," said Kevin Mansell, the retail chain's president and chief executive officer.
Warm weather in some parts of the country throughout February, along with added discounts for Valentine's Day and lower fuel costs, also might have helped drive sales during the month.

"We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending toward discretionary categories," said Eduardo Castro-Wright, vice chairman of Wal-Mart, in a recent media release.

Such variables might not come into play in the immediate future.

"We are careful not to over-interpret one or two months," warned Niemira. "There are still a lot of challenges with this economy."

History has shown that no other industry has been a more accurate indicator of economic recovery than the auto industry, Niemira said.

With the credit industry still in a flux, it is unknown when the economy will make a full recovery. Banks still are unable to grant loans.

Automobiles are discretionary items and consumers generally don't buy such items during a recession or when there's fear of a pending depression. They won't purchase a new car or truck until they are imbued with more confidence, economists have said.

"The automotive industry is a big part of the equation here," said Niemira. "It provides a window. When you see more stability in that market, I'd start to be more optimistic. If the (auto) industry isn't part of this recovery, we won't have any recovery."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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