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Why hints of spring didn’t entice consumer retail spending

Chanderlekha Nayar

Analyzing the effects of last week's important indicators on ETFs (Part 2 of 10)

(Continued from Part 1)

Same-store sales

As per data released last week, retail economic activity continued to trail on bearish investor sentiments despite improving weather. As per Market Realist analyst Ingrid Pan, heating degree days for the week ending February 22, 2014, in the U.S. totaled 169 versus the normal figure of 192 for prior weeks. The International Council of Shopping Centers, ICSC, and Goldman Sachs sample same-stores weekly index fell 0.6% versus the prior week, while Redbook’s same-store year-on-year rate declined to 2.9% on February 22 from 3.2% the previous week.

Same-stores sales, also known as “comparable store sales,” measure changes in sales over a defined period, usually year-over-year for all stores open for more than a year. The pattern in consumer spending is often the foremost influence on stock and bond markets, both of which posted a decline in reaction to dwindling retail sales.

ICSC-Goldman Sachs Index

The ICSC-Goldman Sachs Index provides a weekly snapshot of U.S. retail chain store sales. The index measures comparable store sales at major retail chains, excluding restaurant and vehicle demand. It accounts for roughly 10% of total retail sales.

Since the data is released weekly, it allows analysts and investors to monitor the impact of holiday seasons on retailers’ profits. The weekly index is constructed using sales-weighted geometric average growth rates to preserve long-term consistency, and it’s statistically benchmarked to broad-based monthly retail industry sales aggregates.

Continue to Part 3

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