Consumer Insights

Retail same-store sales stepped up to a 4.9 percent gain in January largely on the back of improved results from a few retailers such as Costco and Target.

That’s according to Kantar Retail, which noted that the sales-weighted composite for the 21 retailers reporting – most of them apparel retailers – was better than the 3.6 percent same-store sales gain last month and the 4.2 percent gain in January 2011. (Calculations exclude fuel and international sales for Costco; J.C. Penney has stopped reporting and Walgreen did not report in time to be included.)

The results were led by the stronger-than-average gains at Costco, among Food, Drug and Mass retailers. Apparel and Accessory Stores were slightly below average. Department Stores lagged the most.

January’s gains occurred despite warm weather curbing winter apparel sales, relatively tougher year-ago comparison periods, and slowing improvement in shoppers’ spending intentions.

“Whether January’s growth can be sustained may depend on whether shoppers’ spending intentions show more signs of stalling out in the months ahead,” said Frank Badillo, Kantar senior economist. “That underlying trend appears to be overwhelmed at the moment by the mixed retail and economic reports.”

The support that same-store sales growth received from shoppers’ spending intentions, as tracked by Kantar Retail’s ShopperScape survey, was more modest in January than the prior three months.

The percentage of shoppers planning to spend less in the coming month edged lower in January (as measured by a three-month moving average). The slight improvement was a break from prior months, when the measure improved by nearly a percentage point each month.

Unlike the prior three months, there was no improvement in the percentage of shoppers planning to spend more in the coming month. The percentage took a slight step backward in January, although it was statistically about the same as December.

The biggest gain in spending intentions in January was among shoppers planning to spend about the same in the coming month. That share topped 53 percent, which is still down from the high of 56 percent reached in February of last year.

Spending intentions may be getting some boost from an improving perception of household income, but other financial factors are having a mixed impact. Significantly more households in January were feeling better off in terms of their income level compared with the prior month and a year ago. Conversely, significantly fewer were feeling worse off in terms of their income level compared with the prior month. Fewer households were feeling worse off compared with the prior month in terms of job security, mortgage/car payments, investments and home values.

The remaining financial health metrics are otherwise mixed or negative. For example, households’ perceptions of their investments remain down from a year ago.

The ShopperScape survey is conducted online each month with a sample of 4,000 U.S. primary household shoppers. Results from the survey are available to Kantar Retail Shopper Insights subscribers. For more information, visit the company online.