Shopper Spending Surprisingly Strong In March

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Revenue reports from retailers from Costco to Victoria's Secret extend the streak of strong spending from late last year. Photo shrimpcrackerz
Revenue reports from retailers from Costco to Victoria's Secret extend the streak of strong spending from late last year. Photo shrimpcrackerz

by Anne D'Innocenzio

NEW YORK (AP) - Shoppers shrugged off higher gas prices and cool temperatures to give retailers a surprisingly solid March.

Revenue reports from retailers from Costco to Victoria's Secret extend the streak of strong spending from late last year and suggest that an improving economy and recent job growth are outweighing pressure from higher pump prices.

Retailers collectively saw a 2 percent increase over last March, the International Council of Shopping Centers said. That compares with expectations for flat revenue or a small decline.

The increase is better than it looks because this year's late Easter depressed results by 3 to 5 percentage points, analysts say.

Many stores reported revenue gains that handily beat Wall Street expectations. Target Corp. reported a smaller decline than Wall Street expected.

Saks Inc.'s sales surged beyond estimates, proving once again that the wealthy are buying status goods from Gucci bags to Hermes scarves.

Gap Inc. was one of the few big losers, reporting a decline that was worse than expected and warning of disappointing earnings. Japan's earthquake, tsunami and nuclear crisis also took a toll on Gap, which operates 150 stores there.

Many analysts had expected retail revenue to decline slightly in March, largely because the late Easter will shift most holiday spending into April.

The calendar quirk meant retailers faced their toughest comparison in at least 10 years, Perkins said. An Easter that fell on April 4 helped drive last March's revenue figures up 9 percent. This year, Easter is on April 24.

Clothing sellers are raising prices to offset soaring costs for labor in China and for raw materials like cotton.

Target posted a 5.5 percent drop in March, smaller than the 6.4 percent expected.

Among department stores, Cincinnati-based Macy's Inc. reported a 0.9 percent increase, better than expected, as shoppers picked up new spring clothing.

"March sales exceeded our expectations and demonstrated that our spring fashion assortments are hitting the mark with customers," CEO Terry J. Lundgren said in a statement.

J.C. Penney Co. reported a 0.3 percent decline in March, less than the 3.4 percent decrease analysts expected.

Limited, based in Columbus, Ohio, reported a robust 14 percent gain, sharply higher than analysts expected, driven by strength at its Victoria's Secret stores.

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