Nemo Knocks Down February Retail Sales

snowmageddon“The fiscal month of February got off to a chilly start,” begins the ICSC-Goldman Sachs retail sales report for the first week of February. Largely due to a massive snow storm hammering the Northeast, retail sales gave up the previous week’s momentum and declined 2.5 percent for the week ended February 9. Year over year, ICSC reported a 2.1 percent increase in sales, a decline from the previous rate of 2.6 percent year-over-year growth.

Last Friday, as the storm brewed and every other headline contained a pun about finding Nemo, economists and investors speculated about the possible impact of the storm. Not only were thousands of flights cancelled or delayed, but businesses, schools, roads, and public transportation were shut down ahead of and during the storm, pretty much bringing commerce in the Northeast to a standstill. The negative impact on comparable store sales at major retail chains, which is what the ICSC-Goldman report tracks, was obvious.

But where there were losers, there were also winners. “Grocery stores, wholesale clubs and drug stores seemed to benefit from the stock-up effect ahead of the blizzard,” commented Michael Niemira, ICSC vice president of research and chief economist. For the entire month of February, ICSC research forecast a 3.5 percent increase in sales excluding drug stores.

Complimenting the ICSC-Goldman report was the slightly-more turbulent Redbook report, which showed a 2.4 percent year-over-year increase in sales…

The Redbook offers a month-over-moth comparison that is calculated differently than most other reports. The Redbook report compares each month’s total weekly results to date to the average for the previous month. This means that the results for the week ended February 9 are compared to the average for all of January, yielding a 1.1 percent month-to-date increase in sales versus January. When next week’s data is released, the month-over-month figure will be re-calculated to reflect the new information.

Before we look at how some major retailers did for the period, here’s a quick breakdown of ICSC-Goldman and Redbook data for the past four weeks.

Week Ending Index (1977=100) ICSC Year/Year ICSC Weekly Redbook Year/Year
Feb. 9, 2013 516.8 +2.1% -2.5% +2.4%
Feb. 2, 2013 530.0 +2.6% +2.4% +1.5%
Jan. 26, 2013 517.8 +2.0% -1.0% +1.6%
Jan. 19, 2013 523.2 +3.2% -1.5% +1.8%

Both reports are correlated with the general merchandise portion of retails sales, and account for about 10 percent of total retail sales.

Wal-Mart (NYSE:WMT) was a clear winner for the period. The stock climbed 2.66 percent for the week ended February 9. Costco (NASDAQ:COST) and CVS (NYSE:CVS) were each up less than half a percent, while Home Depot (NYSE:HD) was up 1 percent. These companies likely benefited from pre-storm shopping, and Home Depot will likely continue to see strong sales as the Northeast not only digs itself out and repairs damage after Nemo, but prepares itself for what could be another storm heading in from the Southern Plains.

Wal-Mart Stores, Inc. Common St Stock Chart - WMT Interactive Chart - Yahoo! Finance

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