Cooler Weather Puts a Chill Into Retail Sales Monthly Comparisons, According to National Retail Federation

Washington, DC, March 14, 2006 – While month-to-month comparisons were tough on retailers, the cooler weather did not hamper year-over-year gains. According to the National Retail Federation (NRF), retail industry sales for February (which exclude automobiles, gas stations, and restaurants) rose a solid 7.2 percent over last year and decreased 0.4 percent seasonally adjusted over January. In fact, January sales were so strong that they were revised upward to 8.4 percent above the previous year and 2.8 percent seasonally adjusted from December.

“Given the unexpected strength in sales for January, it is not a surprise to see some month-to-month weakness in sales,” said NRF Chief Economist Rosalind Wells. “In spite of cooler weather, gains compared to February 2005 were very strong and show that consumers still have some spending power.”

February retail sales released today by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) declined 1.3 percent seasonally adjusted from January and increased 6.5 percent unadjusted year-over-year. The decline is attributed to a slowdown in the auto sector and the strength of January sales, buoyed by unseasonably warmer weather.

Many retailers experienced year-over-year growth. No category performed better than building material and garden equipment and supplies dealers. Sales in this category increased a remarkable 20.6 percent unadjusted year-over-year. Furniture and home furnishings stores also saw growth, with sales rising 6.9 percent unadjusted over last February. Health and personal care stores continue to outperform as consumers begin to focus on necessity purchases. Sales in this category increased 7.1 percent unadjusted from the prior year.

The cooler weather put a chill on apparel sales in February. Sales at clothing and clothing accessory stores (which include jewelry stores, a popular Valentine’s Day destination) were up only 0.9 percent unadjusted over last year.

The National Retail Federation is the world ‘s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry ‘s key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees – about one in five American workers – and 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

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