Datatracker ComScore released estimates Tuesday that said e-commerce sales rose 12 percent to $38.0 billion in the first quarter. This is the sixth consecutive quarter of positive year-over-year growth and the second quarter of double-digit growth.
Still, e-commerce sales continue to be only a small part of the retail picture, even though it seems each quarter more and more sales are shifting to this channel.
“Faced with rapidly rising gas prices and stubbornly high unemployment, consumers continued to take advantage of the Internet’s lower prices by shifting their spending from offline retail stores," said Gian Fulgoni, ComScore's chairman. "In fact, in the first quarter the growth in e-commerce spending was roughly double that observed at offline retail. While we would expect online buying to dampen slightly if gas prices continue to eat into discretionary spending, it’s clear that e-commerce has become a mainstay in consumer behavior, driven by the attraction of both lower prices and convenience.”
According to ComScore, the number of individual buyers shopping online increased by 7 percent. These buyers also completed more transactions than they did in the first quarter of 2010. However, there was a slight decline in the value of each transaction.
But with more of the consumer budget being eaten up at the gas pump and in the grocery store, the big concern remains how long can consumers withstand the pressure.
Citigroup analyst Deborah Weinswig said that although many of the monthly same-store sales results for retailers topped her estimates each month of the first quarter, the quarter ended on "a soft note," especially at department stores and home-improvement retailers.
Weinswig expects BJ's Wholesale Club , Kohl's , Macy's ,Nordstrom , and Wal-Mart Stores have the best chances of topping Thomson Reuters estimates, but her forecasts are in line with consensus expectations for Costco and Saks .
Home Depot , JC Penney , Lowe's and Target are most likely to fall short of the average of analysts' estimates, according to Weinswig.
"We believe that unfavorable weather in April delayed the start of the Spring selling season in the Northeast, Midwest and Northwest," she said.
Since investors are always looking ahead, the worst part for the stocks may be that second-quarter forecasts are likely to be disappointing, according to the analyst.
"We believe that retailers will likely provide cautious second-quarter guidance when they report," she said. "Moderate and low-income consumers are feeling pressure from the slow economic recovery and rising gas prices, while the high-end remains insulated."
Retail earnings get underway on Wednesday with Macy's earnings reports. Kohl's will issue earnings on Thursday. Then next week, there will be reports from JCPenney and Lowe's on Monday, Home Depot and Wal-Mart on Tuesday, and Target on Wednesday, among other retailers.
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