The monthly reports of retail year-over-year comp (comparable sales) is often viewed a strong sign of the health of retailers; however, the recent positive gains are being plotted against the sales performance of 2009 — not a banner year for retail sales. While the January-over-January gain of 4.7% is an encouraging sign that the industry is recovering, the sales remain significantly lower than the volumes of even two years. As quoted from blog article Retail Sales Advance the “Year-over-year numbers, though, often tell you as much about conditions a year ago as they say about current conditions.”

Like the Retail Sales Advance article discusses, PBBI has also directly witnessed through our retail and restaurant client relationships that change sales comp numbers without historic context can be misleading. Moreover, the shape and size of this retail recovery is not being share equally among all retailers or even amongst all retailers in the same retail specialties (e.g., home improvement, electronics, and apparel).

The graphs below depict the national historic trends in total retail sales, and consumer confidence and sentiment. Naturally there is a link between the consumers’ spending and the consumers’ feelings towards spending — the peaks and valleys generally follow the same trend. Even though none of the information provided in the charts is all that new, the graphical representation of this information clearly shows just how hard this recession has affected retailers. So when you hear great news about the retail sales recovery, just know it is all relative.

US Retail Sales

Consumer Confidence and Sentiment

Year-Over-Year Change in Retail Sales