Transcripts

Consumers Sprang Into Shopping In April

PAUL KANGAS: Those high gasoline prices did not keep Americans from splurging on spending last month. U.S. retailers rang up robust sales in April, with the biggest monthly gains in two years. As Suzanne Pratt reports, chain stores from Wal-Mart to Limited Brands benefited from warmer weather and Easter-related purchases.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Thanks to beautiful spring weather in much of the country and Easter coming in April, Americans went shopping in a big way last month. They bought clothing and accessories. They bought Easter candy and they bought toys and video games. Retail experts say Americans are feeling flush.

BOB BUCHANAN, RETAIL ANALYST, A.G. EDWARDS: I think the housing market is still very strong, despite anecdotal evidence to the contrary. And I think that we continue to see quarter after quarter increase in home equity values and also household net worth. And, I think that`s really powering the consumer.

PRATT: Wal-Mart and Target lead the way with a nearly 7 percent increase and a more than 10 percent gain. Nordstrom posted a jump of more than 7 percent. Federated was one of few weak spots with a drop of just under 1 percent. Gap slipped again, while Abercrombie & Fitch rang up a stunning 17 percent increase. Experts say children`s and teen retailers benefited most from Easter coming in April this year.

KIMBERLY GREENBERGER, RETAIL ANALYST, CITIGROUP: For them it was really that high school and college students saw their spring breaks shift out of March and into April. They were buying product either while on vacation or in preparation for vacation. And, when the weather perked up, they went out and started buying stuff in anticipation of summer.

PRATT: The one major surprise about last month`s numbers was that consumers did not appear to be much deterred by higher gas prices. Experts say even though prices at the pump are nearing record levels, they just aren`t high enough to take a really big bit out of consumption.

GREENBERGER: What gas prices are doing so far and this is what we expect them to continue to do for the rest of the year is haircut the ability for consumer spending to grow year over year.

PRATT: Most retail experts predict the good sales numbers will continue in May. So-so weather on both coasts somewhat reduced spending in those areas last month. As a result, experts say there`s a lot of pent up demand that could mean shopping trips this month. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.