The early Easter holiday, which bolstered retail sales in March, had the opposite effect in April, according to the April NRF Retail Executive Opinion Survey.
Citing weaker sales and traffic as the primary cause, the Retail Sector Performance Index for April dropped 7.9 points from the previous month and 8.8 points from April 2004 to a reading of 50.5. (The RSPI measures retail executives’ evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and a six-month-ahead sales outlook expectation. The RSPI is based on a scale of 0.0-100.0 with 50.0 equaling normal.)
“We were not surprised to see some weakness last month,” said NRF President and CEO Tracy Mullin. “Given the Easter shift to March, retailers were hard-pressed to compete with last April’s strong gains.”
The main reason for the decline in April was found in the Sales Index (measurement of sales traffic and avg. transaction per customer), which posted a slightly below normal reading of 44.5 (16.9 points lower than March). However, while sales and traffic slowed in April, basic measurements in retail operations remained strong. According to the survey, the Operations Index for April, which measures inventory levels and employment, rose 1.9 points from March to a reading of 54.2.
As interest rates and prices at the pump crept higher in April, retailers began showing signs of caution as they looked to the future. The Demand Outlook, a six-month-ahead sales outlook, dropped 8.7 points in April last month to 52.8. “April left retailers with unseasonably cooler weather and no holiday to promote,” Mullin said. “May sales should provide a boost as Mother’s Day spending is expected to be strong, helping retailers make up for a lackluster April.”