Retail Executives’ Mood Brightens in May Despite Weak Traffic…

The latest survey of retail executives conducted by the National Retail Federation saw the mood in the corner office recover a bit from the sharp downturn in April as a brighter long-term outlook, tight controls on inventories, and stronger average tickets more than offset continued concerns about customer traffic and pricing.

According to the most recent NRF Executive Opinion Survey, a monthly index by the National Retail Federation, the Retail Sector Performance Index (RSPI) for May improved nearly two points from the April reading, but was still 6.6 points below the RSPI for May 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.

Although sales and traffic for the month of May were below normal, the average transaction size per customer was very healthy with a reading of 64.3, which was 11.5 points higher than the previous month.

“While unseasonably cooler weather hurt customer traffic, retailers were clearly making every sale count as consumers were spending for mom on her special day,” said NRF president and CEO Tracy Mullin in a release. “As the weather begins to warm up and gas prices continue to drop, we expect retailers to shake this summer swoon.”

Retail Operations continue to be a bright spot for the industry as the Operations Index remained above normal with a reading of 53.6 points, a slight decrease from April’s reading of 54.2. The other good news is that the executives took a more positive approach to their outlook going into holiday. The Demand Outlook, which measures the respondents six-month look-ahead view, increased 4.3 points in May versus the April reading.