Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Standard view
Full view
of .
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1


Ratings: (0)|Views: 4|Likes:
Published by api-227433089

More info:

Published by: api-227433089 on Mar 14, 2014
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less





March U.S. Retail Sales Update: SalesAdvanced And Should ContinueImproving Through 2014
Primary Credit Analysts:
Diya G Iyer, New York (1) 212-438-4001; diya.iyer@standardandpoors.comRobert E Schulz, CFA, New York (1) 212-438-7808; robert.schulz@standardandpoors.com
Secondary Contacts:
Ana Lai, CFA, New York (1) 212-438-6895; ana.lai@standardandpoors.comDavid M Kuntz, New York (1) 212-438-5022; david.m.kuntz@standardandpoors.com
Table Of Contents
1275688 | 301674531
March U.S. Retail Sales Update: Sales AdvancedAnd Should Continue Improving Through 2014
U.S. retail sales ticked up slightly in February, as cold weather began to dissipate and consumers warmed up to goodsranging from furniture to clothing. Many of the issuers we rate remained highly promotional beyond the typicalmarkdowns that follow the holiday season. Others, such as Staples Inc. and RadioShack Corp. announced plans forsignificant store closures. Overall, we believe improved outlooks for the stock market, housing, and employment couldmean continued sales gains as the year progresses, though low-end consumers will remain challenged as they benefitless from such trends.U.S. retail sales increased 0.3% in February after declining a revised 0.6% in January. Excluding spending on gas,autos, and building supplies, retail sales rose 0.3% following a 0.6% decrease in January. Among the biggest winnerswere health and personal care stores, which were up 5.5% from February 2013, and non-store retailers, which were up6.3% from last year and include online sellers that benefited from the frosty winter (aka the polar vortex) as consumersshunned brick-and-mortar formats. Meanwhile, although department stores and sporting good vendors saw gains inFebruary, the categories were down 4.8% and 5.2%, respectively, from February 2013 partly because of weakness atlocations such as malls and outdoor shopping centers.Consumer sentiment was flat in February after a slight decline in January, and we expect continued improvement thisyear, resulting in a 2.9% increase in 2014 real consumer spending compared with 2.0% in 2013. The latest availableFirst Data SpendTrend retail dollar volume growth--an indicator of consumer spending using credit, debit, andcheck--remained positive at 2.4%, down slightly from January's 2.5% growth, further confirming consumer willingnessto resume shopping this quarter.Given receptive capital markets for refinancing and dividend recapitalization, debt issuance has remained strong,particularly among lower-rated companies. New issuers this year include Talbots Inc., Lands’ End Inc., and the parentcompany of 1-800-Contacts Inc. Notable rating actions this month included revising the outlook on J.C. Penney Co.Inc. to stable from negative on modest fourth quarter improvement and keeping our ratings on Safeway Inc., includingthe 'BBB' corporate credit rating, on CreditWatch with negative implications, given the agreement for a group led byCerberus Capital Management LP to buy the company in a deal valued at more than $9 billion.We believe shoppers will continue to return to a variety of retail segments this spring selling season, from homefurnishing vendors to discounters, given an improved U.S. economic outlook for 2014. Exceptions include some casualdining operators, for which sales and traffic are under pressure from value-seeking customers. Overall we areforecasting a low-single-digit same-store sales improvement across issuers this year, and will be watching closely asretailers continue to manage excess capacity and promotional activity.
Retail Trends: Graphic Snapshot
This month we are revising our format and plan to now present eight charts that we think tell a crisp graphic storyabout key macroeconomic and segment trends in the retail sector. For example, same-store sales seem to be settling
1275688 | 301674531
in between 2% and 4% for now, while autos, eating and drinking, and furniture categories are showing some softness.
1275688 | 301674531
March U.S. Retail Sales Update: Sales Advanced And Should Continue Improving Through 2014

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->