Retail sales data points to a weak start to spending activity for 2015, as consumers pocketed gas savings, and paid down debt. Bobbi Rebell reports.
It should have been a slam dunk for retailers - massive savings at the pump - gas prices are down almost 40 percent since June setting up what many thought would be a rebound after a weak December for U.S. retailers. But no - January retail sales, excluding autos and gas inched up just one tenth of one percent, less than forecasted. What happened? Jharonne Martis, director of consumer research at Thomson Reuters: (SOUNDBITE) JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS (ENGLISH) SAYING: "Consumers are definitely using the money that they are saving and they are deleveraging it, and they are putting it in savings." LIM College's Michael Londrigan agrees, and adds that the consumer mindset has changed post recession: (SOUNDBITE) MICHAEL LONDRIGAN, LIM COLLEGE (ENGLISH) SAYING: "Yes, they have been saving some money at the pump, a considerable amount I would imagine, but taking that and running out and buying a new yoga outfit, a new pair of jeans, a sweater. I think, they are being a little conservative and saying 'I've got some debt here that I want to pay down, and let's do that, and go forward, and see what the economy will bring.'" But still, the cheaper gas prices, and improving job picture are expected to boost consumer spending as the year goes on. But consumers are still looking for deals. (SOUNDBITE) JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS (ENGLISH) SAYING: "Consumers still want a discount. Retailers are just being smarter. They are offering a few items on sale and the other items at full price, complimentary items, and that's where the retailers are making their money." Those better profit margins and improving consumer confidence should lead to better results in the spring. Martis adds that a number of retailers have been raising their outlooks for that reason.