Cold Front Lifts Retail Sales

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Oct. 11, 2005--A major cold front following weeks of summer-like weather nudged flat retail chain store sales up 0.2% last week, the International Council of Shopping Centers reported Tuesday. At the same time, higher gas prices combined with colder temperatures are moving more shoppers online, according to a recent online retail sales survey.

Small businesses account for well over half of the country's 33,160 catalog, online and non-store retailers, according to BizStats.com. A full 65% have total assets below $100,000, with 22% more posting between $100,000 and $500,000.

"Wild cards like high gasoline prices and bad weather may even spur shoppers to do more of their holiday buying over the Internet," said Jeffrey Grau, a senior analyst at eMarketer, a market research firm.

Colder weather has already pushed the ICSC weekly chain store sales index up 2.7% over the same period last year, gaining strength for the third consecutive week as temperatures begin to drop. The index is compiled from weekly returns reported by a group of major discount, department and chain stores across the country.

"This should certainly get consumers thinking about fall and even winter apparel as the month unfolds," said Michael Niemira, ICSC's research director. Overall, Niemira expects sales this month to increase 3% over the previous year.

Last month, big chain stores slashed prices to boost returns, as the aftermath of the devastating hurricane season kept gas prices above $3 per gallon.

Even then, retail sales dropped to their slowest pace in four months, up just 4% from August, according to ICSC figures. Hardest hit were clothing outlets like Gap, Ann Taylor and others where back-to-school and cold-weather apparel needs usually make for stronger sales.

By contrast, online retailers are reporting a surge in business as shoppers continue to migrate to the Internet, market watchers said, spurred on by high gas prices and lousy weather.

Fourth quarter retail sales over the Internet are expected to reach $26.23 billion this year, up 26.9% from last year, according to a recent eMarket report.

Along with gas prices and colder temperatures, Grau credits the growth with improved online order fulfillments, a longer shopping season on the Internet, and intense competition among online retailers.

In a recent survey by Shopzilla, a comparison shopping Web site, 40% of more than 1,600 consumers polled said they had increased their online buying as a direct result of high gas prices. A full 15% said they shopped online to avoid burning gas driving to stores, results echoed last week in a broader nationwide survey by Retail Forward, a global retail management firm.