ShopperTrak: Strong Spring Start for Retail Won't Sustain Quarter

(MoneyWatch)  Research firm ShopperTrak said Friday that spring started well for retailers, but it isn't so sunny about the second quarter's overall prospects.

According to ShopperTrak's National Retail Sales Estimate year-over-year retail revenues increased a slight 0.2 percent for the week ended April 4 and a slightly better 0.6 percent in the previous seven days ended March 28. The consecutive occurrences represent the first time in 2009 that year-over-year sales gained for two weeks in a row, and the increases came despite lousy weather in much of the country. The catalyst for the improved numbers was the Easter shift, which hurt March results for some retailers, Wal-Mart conspicuous among them. Seasonal promotions helped to get consumers spending, ShopperTrak stated, so it looks like the spring holidays may make up for weakness in the first three quarters of March, especially because the research firm, although it hadn't announced definitive results, said that it expected a strong week lead up to the Easter and Passover celebrations.

Unfortunately, says ShopperTrak, an early spring surge can't save the second quarter, as job losses, deflated consumer confidence and reduced personal wealth are keeping a lot of consumers out of stores. Its Retail Traffic Index study predicts foot traffic, the measure of bodies actually entering stores, will tumble by 13% in the quarter, a decline that will contribute to a 2.4% slide in retail sales in the period.

Looking forward, ShopperTrak co-founder Bill Martin said the company's research supported the theory that a solid economic recovery won't take hold until early in 2010. He added that the next big boost for retailing should come with the back to school shopping season, which begins in August.

Back to school also should be something of a test. A stronger than anticipated back to school season may signal a retail recovery in time for the holidays while one that lives up to consensus predictions would indicate a mediocre end of year season and recovery gaining ground early next year. On the particularly unhappy side, a weaker than expected back to school period may signal that the gloomier of prognosticators is correct in pinning the recovery to the second half of 2010.