From the sounds of all the economic news about February’s retail sales, you might be confused as to why experts are still forecasting a positive retail sales outlook. RetailNext, an analytics company that tracks brick-and-mortar retail sales, reported that February retail sales were -10.4% vs. last year. While a double-digit decline can be very disturbing, if you dig deeper you see reason not to panic.
We all know that it has been a rough winter but we may not have realized the impact on retail sales that the weather can have. RetailNext traffic (total number of shoppers) of -12.5% vs. last year tells us that shoppers simply couldn’t get out to the stores. Those who did get out displayed actions you would expect to see in a growing economy. The average transaction value and the sales per shopper were +2.3% and +2.8% over last year respectively. And the conversion rate (sales transaction as a percentage of traffic) was +0.5% vs. last year telling us that people were spending more frequently than they have in the past.
This is why experts in organizations like the National Retail Federation remain bullish on sales this year. Imagine if normal weather conditions allowed shoppers to get out at the same pace as last year. Now think about the pent up demand of those shoppers that are able to get out now. I imagine the next few months will be very positive.
The Association for Retail Environments (A.R.E.) is putting greater emphasis on assisting our members’ retailer customers plan for the future. Through networking, education, and marketing we continue to work on advancing the retail environments industry.