Retail Sales Beat Expectations in February

Sales inched up in February for both department and online retailers.

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Retail sales increased by 0.3 percent during February, marking the first increase in three months and showing an improved shopping demand with sales 1.5 percent higher than February 2013, the Department of Commerce reported.

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Sales beat consensus expectations from economists who predicted a slightly more modest 0.2 percent increase. Sales gains were reported in sectors including autos, building materials, health, clothing, sporting goods and restaurants. Sectors that reported losses included grocery, electronics and general merchandise stores.

The drop in sales between December and January was revised to a 0.6 percent drop, which was larger than the 0.4 percent initially reported, reflecting the winter weather’s detrimental effect.

Sales increased during February for both department stores and non-store online retailers. Online purchases are still a small part of U.S. shopping, as e-commerce sales in the fourth quarter of 2013 accounted for 6 percent of total sales, up from 5.4 percent of total sales in the fourth quarter of 2012, according to the Commerce Department.

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Department store sales have, however, been on the decline since the early 2000s after peaking in 2001, due to the rise speciality stores along with the growing online marketplace.

Because of winter storms most of the retail sectors that gained sales in February had posted losses in January, such as furniture, clothing, sporting, department, non-store and restaurants, said Chris Christopher, an economist with IHS Global Insight market research firm. Retail sales are expected to continue to improve as the weather warms up, Christopher said.

“Building material and garden supply stores had two relatively good months,” Christopher said in a statement. “Building material outlets usually get a two-fer when a snow storm rolls into town: first, many households head out to buy shovels, salt, generators and other supplies to prepare for the storm; then they head out to buy materials and goods for home repair caused by the storm.”