US retail sales rise in February, but higher gas prices to cut gains
U.S. retails store sales rose by 4.2 percent in February as consumers go back to stores following severe snowstorms in January.
However, gains in sales may be cut short due to the looming spike in gas prices.
A new data released by Thomson Reuters on Thursday showed a significant increase in U.S. retail sales in February, but soaring prices of gasoline may cut gains early.
Based on the result of the survey, retail stores open at least a year posted a 4.2 percent growth rate last month, beating analysts’ figures of 3.6 percent for the said period.
The survey results also confirmed earlier reports on higher consumer confidence regarding the country’s economy.
Keith Jelinek, director of consulting firm Alix Partners’ retail practice, said that the snowstorms and other extreme weather condition in January has help retail sales figures for the following month as consumers delayed shopping trips to stores.
But despite the surge in sales, Jelinek warned retailers to brace for challenges ahead, saying that “it would be a difficult March for retailers.”
He stressed that many retail store chains would face the “double whammy” of higher priced clothing items and soaring gas prices, which may result to another cutback in the consumers’ spending habit.
Many of the U.S. retailers have already prepared for higher clothing prices, particularly the off-season cotton-based materials. However, gas prices remained to be the biggest and immediate threat to the store owners as political crisis in Libya and other parts of the Middle East escalate.
Not only high fuel prices limit consumers’ shopping trips to stores, it also adds burden to retailers who have to regularly deal with transportation and hauling costs.