Retail Sector Optimism Highest Ever

Retail Sector Optimism Highest Ever

According to the latest findings of the NRF Executive Opinion Survey, retail executives are anxiously looking to the new year with a renewed sense of optimism and hope. The Retail Sector Performance Index (RSPI) reached a new record in January with a reading of 65.0 percent, more than double the same period a year ago, and 9.4 percentage points above December's reading.

(The RSPI measures retail executives' evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and a six-month-ahead sales outlook expectation. The RSPI is based on a scale of 0% - 100% with 50% equaling normal.)

The January Current Demand Index (average of sales and traffic) posted its strongest reading since the survey began with a reading of 68.1 percent, well above the25.5% for the same period a year ago, and 10.8 percentage points above the previous month's reading.

The 75.0% sales index was incredibly strong in January, showing that retailers have done a great job of clearing excess winter inventory while continuing to collect on gift cards that were purchased during the holiday season. The sales index for January was roughly three times stronger year-over-year, and 15.6 percentage points higher than December 2003. Customer traffic also remained strong in January (58.3%), 2.0 percentage points above the previous month.

Retailers are continuing to show a great deal of confidence that the current sales environment will continue. The January Demand Outlook Index (a six-month outlook for sales) stood at 75.0 percent, a solid increase from last month's reading of 62.5 percent and the strongest since the survey began in September 2002.

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