Federated Department Stores To Buy Rival May Stores
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Shoppers look for clothes at Marshall Field’s flagship store in Chicago, Ill. Easter is traditionally a lucrative retail holiday for apparel stores.
By Roland Jones Business news editor
msnbc.com
updated 3/26/2005 11:16:16 AM ET 2005-03-26T16:16:16

With store shelves full of chocolate bunnies and marshmallow chicks, Easter is traditionally one of the busiest shopping holidays of the year. It’s also a boon for apparel retailers, but this year many consumers might be dusting off last year’s fashions when it comes to dressing up in their Sunday best.

The culprit is the chill of an early Easter experts say. This year’s holiday falls earlier than it has in over 15 years, and as a result experts expect American consumers to spend nearly $1 billion less on their Easter spending sprees.

While the same number of Americans who celebrated Easter last year expect to celebrate it this year — about 76 percent — those consumers will be spending less on average, reducing total Easter spending to $9.6 billion from $10.5 billion a year ago according to the NRF’s 2005 Easter Consumer Intentions and Actions Survey, conducted earlier this month.

What’s more, unseasonably cold spring weather in some parts of the country coupled with the psychological impact of a spike in gasoline prices has left consumers less inclined to splash out on new lines of warm-weather clothing.

“There’s still time for consumers to get into the Easter apparel-buying mode, but retailers have resigned themselves to the fact that sales of Easter clothing might not be as robust as a year ago,” said Ellen Tolley, a spokesperson for the National Retail Federation (NRF), the retail sector’s biggest trade group.

The decrease in spending doesn’t reflect a wider downtrend in Easter spending, notes Tolley, but is simply the result of Easter’s timing and colder weather.

“Spring fashion lines have been received favorably and the new styles have been selling fairly well,” said Tolley. “Retailers are just hoping sales will pick up as the weather improves.”

Although those planning to purchase spring clothing this Easter say they will spend as much as they did in 2004 — about $50 per person — demand for apparel is expected to “drop significantly,” according to the NRF’s report, with only 29 percent of consumers planning to buy clothing for Easter, down from 42 percent in 2004.

The phenomenon is adding to a general downward trend in apparel sales says Michael Niemira, chief economist and director of research at the International Council of Shopping Centers. “Regardless when Easter falls, consumers have been spending less and less on apparel for a considerable period of time,” Niemira said.

However, a weaker Easter for apparel sales isn’t likely to have much of an impact on retailers’ sales comparisons for March said Niemira. Easter normally falls in April, and so comparisons with the prior year’s March period will be favorable, and March is not normally a strong month for apparel sales he said.

“The year-to-year comparisons for each retailer won’t look so bad, but April won’t look so good for them either,” Niemira said.

The overall retail sector is still showing healthy growth, Niemira notes.

U.S. retail chain store sales rose 0.2 percent in the week ended March 19 according to data from the International Council of Shopping Centers. Niemira said he expects sales for the month of March to be healthy, increasing by between 3.5 and 4 percent, noting that sales are holding up despite worries of higher energy costs and inflation.

“At some point we’ll get a negative impact from higher energy costs,” Niemira said. “It’s not impacting retail sales right now, but as an economist I worry that it’s only a matter of time until it starts to have an impact on consumer demand.”

Apparel sales might be struggling this year, but consumers are likely to spend just as much money on candy, food and greeting cards.

Americans who celebrate the holiday plan to spend about a third of their Easter budget, or $31, on food, another $14 on candy and $15 on gifts according to the NRF’s Easter spending report. Candy will be the most popular Easter purchase this year, with 86 percent of shoppers planning to purchase chocolate and other sweets over the holiday.

Sales of ham, turkey, corn and potatoes will also be strong, with 77 percent of consumers celebrating Easter planning to buy food according to the NRF’s report, while about half of those consumers plan to purchase gifts and greeting cards.

Easter ranks just behind retail holidays like Christmas, Valentine’s Day and Mother’s Day in terms of spending.

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