Here we are, only 3 ½ weeks until the end of Q1. But wait, what happened to February! The answer is simple - everything is accelerating. Retail sales are up, along with several commodities critical to retail. There are now even inflation fears!

The Retail Marketplace
Sales are exceeding expectations. Reuter's comparable store sales index rose 4.2% for February, exceeding estimates for a 3.6% increase. Although February typically includes seasonal clearance you'll see how retailers were successful at introducing new merchandise and driving top-line sales growth. Check out the below link to February National Retail Results.

DSW delivered a whopping 14.9% increase, even after a 10.1% increase in third quarter. In apparel, Limited Brands delivered another red hot 12% increase for February after a 24% January comp store performance. Ann Taylor and Coach delivered outstanding 11% and 12.6% comp store increases for their most recent quarters. The consumer is back! But they're not only buying apparel.

Everything automotive is sizzling. Car Max reported 23% increase for third quarter. Auto parts retailers Advance Auto Parts, Auto Zone and O'Reilly posted increases of 11%, 12.7% and 12%, respectively.

The boating market is coming alive quickly. The WestWinn Group of Vernon, BC shared that demand continues to be at near capacity for their popular line of Jetcraft and Kingfisher boats. Some dealers report being totally surprised by seasonal boat show sales results. For boating, this is a huge shift from the past two years.

Unemployment - Some Areas Much Stronger
There were few headlines until this weekend, when the Labor Department released U.S. Unemployment Falls From 9.0 to 8.9%. The private sector added 222,000 jobs, while the state and local level governments shed 30,000 positions.

The management, professional and related occupation unemployment rate fell from 4.8 to 4.4% year-over-year. The sales and related occupations unemployment rate also fell from 10.2 to 9.0% year-over-year. Experts advise that we should expect to see consistent slow and steady job growth, good news for the retail industry.

Click here for February National Retailer Sales Results

After a holiday season of consistent retail growth we expected the same for January. We're happy to report that retail sales growth did continue for the majority of retailers. Several retailers have announced expansion plans for 2011, validating confidence in consumer spending.

In their January summary, Chain Store Age reported, "The reports, many of which surpassed Wall Street expectations, offer encouragement that strength in consumer spending is continuing after a merry holiday season." Analysts were surprised that repeated snowstorms did little to curtail a robust January retail performance.

Unemployment
The Labor Department reported a gain of 50,000 jobs, and nationwide unemployment shrinking to 9.0% from 9.4% in January. Seasonally adjusted professional level unemployment shrank to 4.7% from 5.0%. For those with a Bachelor's degree or higher the unemployment rate decreased from 4.8% to 4.2% for the same period.

Watch Area
The auto parts retailers continue to enjoy near double-digit increases as we turn the corner into 2011. It's our belief that the new car industry is poised for an explosion of new car sales. Start watching for the dealer paper license plates - you'll start seeing more any day.

Click here for January National Retail Sales Results

The most exciting part of the retail business is seeing broad-based growth across the industry. I’m happy to report that U.S. retailers have just landed the best holiday season since 2006. There is some evidence that conservative inventory positions may have limited some retailer potential for December.

The ICSC group reported a 3.8% combined Nov-Dec comparable store sales increase. This compares to 2006 when the industry reported an increase in the 4.4% range. Think back to 2006. I don’t recall any complaints about sales that year! Although the pure December sales increase has been reported as +3.1%, when combined with the 5.8% November increase the 2010 holiday season is one that most retailers can be proud of.

In November I talked about consumers looking for good value. Although we have a few teen retailers who didn’t attract their customers with competitive value, others like Zumiez, Buckle and Abercrombie did and delivered excellent comp store increases ranging from +6.1% to +15%.

During a post-holiday tour I visited a JC Penney store to find the men’s sales area with virtually blank walls and little RTW to sell. When asked, a salesperson replied, “Our stockroom is completely empty. We sold all our clothes.” On the Monday after Christmas, Nordstrom in San Diego was swamped with eager-to-buy customers – it was a mad-house of retail activity! Nordstrom posted a +8.4% comp store performance for December. Macy’s and Kohl’s both turned in respectable increases of +3.9%.

At the end of the day it’s all good. Many retailers took advantage of their pre-holiday trend and planned inventories to support growth. Their focus on value with well-planned inventories and promotions generated solid business that will likely continue in first quarter 2011. Consumers are buying and the best retailers are giving them what they want.

Click here for November National Retail Sales Results