Retail data: Consumers 'took a breather' in April

[May 05, 2010]  NEW YORK (AP) -- Consumers bought less clothing and footwear in April than they did in the same month last year but opened their wallets for electronics, major appliances and status goods, purchase data released Wednesday show.

The month's rainy weather contributed to mixed results, including a sharp increase in online sales, according to the latest numbers from MasterCard Advisors' SpendingPulse.

It was the ninth-straight month that online sales rose compared with a year earlier.

The figures, which include transactions in all forms including cash, signal that spending is recovering but remained sensitive in April to one-time factors.

Another factor dampening April's sales was a drop in tourism resulting from travel restrictions after Iceland's volcanic eruption, said Michael McNamara, vice president of research and analysis for SpendingPulse. He said spending is stabilizing and there wasn't any broad-based heavy discounting.

"(April) was lumpy," said McNamara, adding that it was "OK" combined with March.

Because an early Easter -- like this year's on April 4 -- can boost March's results and depress April's, analysts combine the two months when trying to gauge consumer behavior.

April figures benefited from relatively easy comparisons to April 2009, when consumers also cut their spending.

Consumers' confidence in the economy rose in April 2010, but the Conference Board business group's index remains below the level that's considered healthy. And unemployment remained high.

Here are SpendingPulse's figures comparing sales April 4 through May 1 with a year earlier, by product category.

- Clothing: Sales fell 3.9 percent from April 2009, and sales that month were 8.2 percent below April 2008. The dip includes a 4.1 percent drop in women's fashions and a 0.5 percent decline in men's.

- Footwear: Sales in this more resilient category fell 1.7 percent.

- Luxury: Excluding jewelry, sales rose 15.5 percent from April 2009, when they dropped 18.1 percent from the year before.

- Appliances: Enjoying increases since September 2009, this category rose 3 percent for April, possibly reflecting the benefit of the housing tax credit and the federal appliance rebate program.

- Electronics: Sales rose 9.7 percent from a year earlier, helped in part by product launches, including Apple Inc.'s iPad tablet computer on April 3.

- Online sales soared 15.6 percent.

The data comes a day before selected major retailers report on sales at their stores that have been open at least a year, considered a key indicator because it excludes results from stores that open or close during the year.

Analysts surveyed by Thomson Reuters predict a 1.6 percent increase for April, following a 9.1 percent gain in March. The estimate for March and April combined is 5.4 percent. That would be the eighth straight increase.

Ken Perkins, president of RetailMetrics, a research firm, expects sales rose 2 percent for April, following an 8.7 percent increase in March. He estimated the early Easter boosted sales up to 3 percentage points in March and depressed them in April by the same amount. Both firms use different methodology.

Perkins said he expects the biggest winners to be discounters and certain mall-based clothing stores like AnnTaylor and Chico's FAS Inc., both of which are seeing a rebound in sales because of dramatically revamped fashions. Teen retailers like Abercrombie & Fitch continued to struggle, though, he said.

"Consumers took a breather" compared with February and March, Perkins said.

But he said the figures don't signal a pullback in the recovery.

"The recovery isn't robust," Perkins said. "It is just chugging along."

[Associated Press; By ANNE D'INNOCENZIO]

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