Hard Goods Are the Weakest Link in March Sales, Says NRF - General Merchandise, Apparel Stores Shore Up GAF Sales -

Apr 12, 2001, 01:00 ET from National Retail Federation

    WASHINGTON, April 12 /PRNewswire/ -- General merchandise and apparel
 specialty stores weathered the gusts of March better than most, according to
 the National Retail Federation (NRF).  Responding to just-released figures
 from the Census Bureau, NRF noted that sales in the GAF category (general
 merchandise, apparel, furniture and home furnishings) are reflecting the
 general softness in the economy, as weakness continued in the durable goods
 sector, which fell 0.7 percent unadjusted from last month and 1.5 percent
 year-over-year.  GAF sales have declined in four out of the past five months.
 For the first quarter of 2001, GAF sales are up 2.5 percent from the same
 quarter a year ago.
     "Both the weakened economy and very difficult sales comparisons against
 the previous year -- when GAF sales jumped 8.7 percent -- account for the
 modest gains we are seeing now," said NRF Chief Economist Rosalind Wells.  "We
 knew that durables would be the hardest hit by the economic slowdown."
     Soft goods retailers have fared better amid recent economic conditions.
 General merchandise and apparel specialty stores both experienced year-over-
 year sales gains in March, by an unadjusted 3.0 percent and 4.9 percent
 respectively.  Furniture and home furnishings stores were the only GAF
 category stores that saw declines in March, dropping 0.7 percent unadjusted
 from February and 0.7 percent year-to-year.
     "The slowdown in consumer spending has been a result of a more cautious
 consumer.  With employment and income growing less rapidly and the erosion of
 the "wealth effect" due to a declining stock market, consumers have become a
 bit more reticent in their spending.  However, spending is not contracting, it
 is merely growing at a more modest pace," emphasized Wells.  "Hence, we
 believe a recession can be avoided and expect GAF sales gains to improve as
 the year progresses. This is based on our belief that Federal Reserve policy
 to reduce interest rates will be successful in stimulating economic growth
 later in the year.  We are forecasting a 4.2 percent increase in GAF sales for
 this year."
 
     The National Retail Federation (NRF) 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 and
 independent stores. NRF members represent an industry that encompasses more
 than 1.4 million U.S. retail establishments, employs more than 20 million
 people -- about 1 in 5 American workers -- and registered 2000 sales of nearly
 $3.2 trillion.  NRF's international members operate stores in more than 50
 nations.  In its role as the retail industry's umbrella group, NRF also
 represents 32 national and 50 state associations in the U.S. as well as 36
 international associations representing retailers abroad.
 
     For more information about NRF, visit its web site at http://www.nrf.com .
 
 

SOURCE National Retail Federation
    WASHINGTON, April 12 /PRNewswire/ -- General merchandise and apparel
 specialty stores weathered the gusts of March better than most, according to
 the National Retail Federation (NRF).  Responding to just-released figures
 from the Census Bureau, NRF noted that sales in the GAF category (general
 merchandise, apparel, furniture and home furnishings) are reflecting the
 general softness in the economy, as weakness continued in the durable goods
 sector, which fell 0.7 percent unadjusted from last month and 1.5 percent
 year-over-year.  GAF sales have declined in four out of the past five months.
 For the first quarter of 2001, GAF sales are up 2.5 percent from the same
 quarter a year ago.
     "Both the weakened economy and very difficult sales comparisons against
 the previous year -- when GAF sales jumped 8.7 percent -- account for the
 modest gains we are seeing now," said NRF Chief Economist Rosalind Wells.  "We
 knew that durables would be the hardest hit by the economic slowdown."
     Soft goods retailers have fared better amid recent economic conditions.
 General merchandise and apparel specialty stores both experienced year-over-
 year sales gains in March, by an unadjusted 3.0 percent and 4.9 percent
 respectively.  Furniture and home furnishings stores were the only GAF
 category stores that saw declines in March, dropping 0.7 percent unadjusted
 from February and 0.7 percent year-to-year.
     "The slowdown in consumer spending has been a result of a more cautious
 consumer.  With employment and income growing less rapidly and the erosion of
 the "wealth effect" due to a declining stock market, consumers have become a
 bit more reticent in their spending.  However, spending is not contracting, it
 is merely growing at a more modest pace," emphasized Wells.  "Hence, we
 believe a recession can be avoided and expect GAF sales gains to improve as
 the year progresses. This is based on our belief that Federal Reserve policy
 to reduce interest rates will be successful in stimulating economic growth
 later in the year.  We are forecasting a 4.2 percent increase in GAF sales for
 this year."
 
     The National Retail Federation (NRF) 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 and
 independent stores. NRF members represent an industry that encompasses more
 than 1.4 million U.S. retail establishments, employs more than 20 million
 people -- about 1 in 5 American workers -- and registered 2000 sales of nearly
 $3.2 trillion.  NRF's international members operate stores in more than 50
 nations.  In its role as the retail industry's umbrella group, NRF also
 represents 32 national and 50 state associations in the U.S. as well as 36
 international associations representing retailers abroad.
 
     For more information about NRF, visit its web site at http://www.nrf.com .
 
 SOURCE  National Retail Federation