As previewed in the Anchor, January retail sales were very soft according to the U.S. Census Bureau Advance Monthly Retail Sales report, with general merchandise retail sales falling mid-to-high-single digits (including retail categories such as furniture & furnishings, consumer electronics, clothing & accessories, sporting goods, office & gift stores, and department stores). Home improvement retail sales also decreased -8%. Weather and weak traffic were the largest contributors to the decline; we see that in the slowdown in restaurant retail sales (+6% from +11% in December 2023) and in our nightlife index. Additionally, the base period was extended as retailers blew out excess inventory last January; moreover, there was a pull-forward of spending into December, rendering January and February as a payback period. The good news: so far, the weather in February has been mild, the economy is in good shape, and the comparative base period is easy (see last year’s summary here). As it relates to retailers’ coming fiscal Q4 2023 results, we’d expect management to highlight strong results during November and December, downplay January as “wrecked by weather,” and share that February has improved (which is how many restaurant operators that have reported Q4 2023 results have described the situation). Our visitation data shows this to be the case (below), with visitation trends across all retailer categories showing improvement versus January trends (per Placer's Industry Trends report).
