Americans went out and shopped the winter clearance racks in January that resulted in strong sales for retailers. Spending is expected to slow as the deals dry up and American consumers begin to feel the increasing gas prices as well as the 2 percent payroll tax hike that took effect in January.
20 retailers reported Thursday that revenue at stores opened at least a year increased an average of 5.1 percent. This was according to the data collected by the International Council of Shopping Centers. The number was above the trade group’s estimate of 3 percent. It was also the highest reading since August, when it was up 6 percent.
The group represented around 13 percent of the $2.4 trillion US retail industry report monthly revenue. The data was an indicator of consumer spending that has been influenced by discounts during the economic downturn.
Once the clearance sales were gone, shoppers also stopped shopping. Analysts said that the absence of big discounts caused sales to decline in the last week of January. These pressures could hurt consumer confidence, which was down to their lowest reading in 14 months according to the Conference Board.
Cato Corp., which sells moderately priced clothing for girls and women, said sales dropped throughout the month because of delays in shoppers’ tax refunds and the hit from the higher payroll taxes to their income. The company reported that their revenue dropped 12 percent in January.
But overall, January was a good month for retailers. Macy’s, which operates Bloomingdale’s and Macy’s stores, said its revenue increased 11.7 percent in January. This was twice the 6.4 percent increase that analysts predicted.
