January’s disappointing retail sales shouldn’t worry retailers, said Jerry Storch, former chief executive officer along with board member of Canadian retail company Hudson’s Bay.
“January just doesn’t matter,” Storch told CNBC on “Power Lunch” Thursday. Storch, who has also been chairman along with CEO of Toys “R” Us along with vice president of the Target said retail sales almost always decline after the holiday rush. “Of course December has higher sales. the item has Christmas inside the item.” He pointed out of which, “we arrived of one of the strongest holiday seasons in many, many years.”
however Wednesday’s retail report by the U.S. Commerce Department left some retailers concerned. Retail sales dipped 0.3 percent in January — the worst decline in 11 months — as consumers cut back on motor vehicles along with building materials. Analysts had expected an increase of 0.2 percent.
Meanwhile, inflation looms on the horizon that has a strong economy, low unemployment, tax breaks coming from the completely new tax law along with increased infrastructure spending, further heightening fears of decreased consumer spending.
“of which’s just a bunch of poppycock,” said Storch, chief executive officer of Storch Advisors, a consulting firm. While retail sales are usually adjusted seasonally in December along with January, a better measurement is usually comparing year-over-year adjustments, he said.
“If you compare of which January to last January, you see of which the numbers are up,” Storch said, referring to the 3.6 percent year over year increase of which January. “There’s no tricky math with seasonally adjusted numbers.”
Modest inflation, such as 2 to 3 percent, Storch said, won’t scare consumers in a not bad economy along with actually benefits most retailers with cost hikes of which can quickly be passed along to consumers. Operating costs, such as wage rates along with rent, tend to adjust in several to 10 year increments, he said.
“So the item takes a long time to come back to you,” Storch said. “In a period of moderate inflation the retailers actually do better.”