The upward trend in retail sales figures might not last

National retail sales figures – and those in the fitness, wintersports and outdoor industries – are up, but some are concerned that the trend might not last.
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Consumers were whipping out their wallets at stores across the nation this spring, but analysts said they don't expect the upward trend in retail sales figures to last into the summer.

The outdoor, fitness and wintersports industries all saw increases in sales in the first quarter – sharing in what Forbes reports was an 8.8 percent increase in April 2011 sales compared with those from April 2010.

While the growth in sales is expected to continue in both the wintersports and fitness industries, the Outdoor Industry Association expects things to slow down overall for its industry – except for sales of bicycles and bicycling, backpacking, hiking and camping equipment. Higher gas prices will likely keep people people seeking those outdoor recreation opportunities closer to home.

Eric Burt, the owner and manager for the Alamosa, Colo.-based Kristi Mountain Sports, said he’s noticed an uptick in sales of daypacks and sleeping bags in the past few months.

Retail sales are up both in stores and online. ComScore (www.comscore.com) reported $38 billion in the first quarter for U.S. retail e-commerce spending – up 12 percent from last year. This growth rate represented the sixth consecutive quarter of positive year-over-year growth and the second for double-digit growth, according to comScore.

Forbes reported, however, that May yielded mixed results for many retailers as shoppers concerned with the rising cost of living (higher gas and food prices) and affected by the cold weather and a stream of disastrous storms weren’t shopping for spring and summer goods. Forbes also reports that the price of cotton is expected to rise from five to 20 percent this summer, driving the price of clothing and apparel higher. Due to raw material and labor inflation, manufacturers have told SNEWS price increases are on the way.

Kamalesh Rao, director of economic research for SpendingPulse, which gathered the data reported in Forbes, said in a statement that although retail sales figures are up, the high unemployment rate and gas prices could affect figures for the rest of the year. The nation's latest unemployment rate stood at 9.1 percent in May 2011, according to the Bureau of Labor Statistics. Though that’s down from the 2010 average of 9.6 percent, it remains historically high, Rao said.

Great expectations

Things are looking up for the snow sports industry – which outperformed general retail in January 2011. Though the wintersports season is over, retail sales figures released from the SnowSports Industry Association (compiled by the Leisure Trends Group) showed an increase in sales figures for January 2011 were 17 percent higher than in January 2010. The SIA expects sales of winter sports equipment to continue to increase.

Nate Porter, the owner and manager of Salida Mountain Sports in Salida, Colo., said his Q1 figures were up from 2010. He said he agreed sales would continue to grow for his store.

“So much of the first quarter is dependent on ski traffic and snow fall, and we had good snow,” Porter said. “We have a pretty optimistic outlook on the summer. Things are pretty optimistic for the outdoor industry as a whole from where I’m sitting.”

Gary Neptune, owner of Boulder, Colo.-based Neptune Mountaineering, also enjoyed great sales this winter, but he doesn’t want to get too confident.

“We had such good snow here that it ended up being a better-than-average snow year and business year,” Neptune said. He fears people might use the good year as an excuse to overbuy merchandise for next season. “People get a little carried away and overly optimistic."

Left out in the cold

Some stores in New Mexico and Southern Colorado did not enjoy the fruits of this trend. The ninth-driest winter on record in that region left a few retailers out in the cold.

Steve Bing, the general manager for Santa Fe, N.M.-based Sangre de Cristo Mountain Works, said sales for winter sports gear were poor throughout the year.

“I think specifically in Santa Fe the economy hasn’t turned around yet despite what the national numbers might say,” Bing said. “The weather has been way off this year.”

Burt said it wasn’t a good year for snowsports equipment sales for him, either.

“We weren’t getting the snow down here,” he said. Burt said the store’s sales suffered because many people from the Northern part of Colorado weren’t making their way south to the San Luis Valley to ski, opting instead to enjoy the snow in the front-range slopes.

Fitness a necessity

According to Tim Hilgert, Glenwood-Colo.-based HealthStyles Exercise Equipment’s regional manager, health and fitness are seen as necessities to some. That’s why both overall and same-store sales are up, he said – at least in Colorado.

HealthStyles has retail, e-commerce, service and commercial departments and Hilgert said there has been growth across the board in all departments.

“We finally see the trend starting to move forward,” Hilgert said, adding overall sales were up 4 percent from 2010 and same-store sales were up 8 percent. “I do feel like it’s a pretty sustained movement forward. I expect us to be up in the second quarter.”

He said the figures are what he’d hoped they’d be.

“I think especially here in Colorado, the economy is starting to bounce back and people are feeling secure in their jobs and situations,” he said. “We have, in general, a pretty health-conscious population in Colorado, and people view (equipment) as not just a luxury item but a necessity. People are more willing to spend money on their health.” 

Mixed results

Bing said retail sales for the first quarter were “spikey. It’s been very up and down – very little consistency.”

Bing doesn’t expect things to get better anytime soon, but with Father’s Day coming, the economy might see a lift. The National Retail Federation recently released results from its Consumer Intentions and Actions Father’s Day survey (which was conducted by BIGresearch). Americans polled plan to spend an average of $106.49 on gifts this year, which is up from the $94.32 consumers spent on dad last year. That’s good news for the outdoor industry as those polled indicated they plan to spend $653 million on gifts at sporting goods stores.

Bing agrees with predictions the upward trend for retail sales in general will not last.

“I think we’re in for a bit of a bumpy ride,” Bing said. “I know people are not spending freely like they had been before the crash three years ago.”

--Ana Trujillo

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