Retail Executives clearly anticipated a more difficult month in April as a result of the Easter shift, according to the most recent NRF Executive Opinion Survey, a monthly index by the National Retail Federation. After two solid months of upbeat survey results, the mood turned sour as the results showed declines in every index except Inventories.

The Retail Sector Performance Index (RSPI) for April fell 7.9 points versus the March reading and 8.8 points from April 2004. The RSPI measures retail executives' evaluations of a number of key metrics and is based on a scale of 0.0 – 100.0 with 50.0 equaling normal.

The survey respondents appeared to be concerned about both the current and long-term prospects of their business; but, also felt that inventories were in good shape to weather any storms.

The Current Demand index had the biggest drop for the month, taking a 20 point hit on the Sales index and Customer Traffic index lines. It appears that conversion rates improved as Average Transactions per Customer fell 10.8 points, but less than the other indices.

What may be most troubling is the sharp decline in the Demand Outlook, which measures the outlook for six months out. Based on the 8.7 point drop here, retail execs don’t have much hope that the retail landscape is going to strengthen anytime soon, an opinion that puts them right back where they started after the tough Christmas. The Pricing Index is also a concern as it usually indicates a willingness of the retailer to pull the trigger on early promotions to move goods.

“April left retailers with unseasonably cooler weather and no holiday to promote,” NRF president and CEO Tracy Mullin noted. “May sales should provide a boost as Mother's Day spending is expected to be strong, helping retailers make up for a lackluster April.” 

NRF Retail Executive Opinion Survey
Summary Statistics — April 2005
  Jan Feb Mar Apr
Retail Perform. Index 50.3 55.6 58.4 50.5
Current Demand Index 45.4 59.2 61.4 44.5
Sales 50 62.5 61.4 41.7
Customer Traffic 41.7 57.5 59.1 38.9
Avg. Trans./Customer 44.4 57.5 63.6 52.8
Operations Index 52.8 52.5 52.3 54.2
Sector Employment 52.8 52.5 47.7 47.2
Sector Inventories 55.6 52.5 56.8 61.1
Demand Outlook 52.8 55 61.5 52.8
Pricing Index 25 40 45.5 38.9