March sales disappoint

A decline in motor vehicle and electronics purchases caused an unexpected decline in sales at U.S. retailers, breaking a two-month streak of sales increases, according to a report from the Commerce Department issued on Tuesday.

“A chilly start to spring and a late Easter combined for dreary March sales,” said Rosalind Wells, chief economist, National Retail Federation. “To compensate for the Easter shift, retailers typically look at March and April together to get a better look at how their stores performed. Easter should give a much-needed boost to April sales.”

One of the only bright spots in March came from health and personal care stores, whose sales increased 0.4% seasonally adjusted over last month and 3.5% unadjusted over last year.

The Commerce Department said total retail sales dropped 1.1%, after rising by 0.3% in February. The decrease was blamed on the growing turbulence in the U.S. auto industry, a factor that slowed sales of motor vehicles and parts by 2.3% this month.

The shift in Easter sales also played a role in consumer purchases of clothing and clothing accessories. Sales at those stores decreased 1.8% seasonally adjusted from February and decreased 8.7% unadjusted over March 2008.

Excluding motor vehicles and parts, retail sales fell 0.9% in March, compared with a 1.0% gain last month. Similarly, gasoline sales also slipped 1.6%, after a 3.1% increase in February.

Sales of electronics also tumbled 5.9%, compared with a 0.7% gain last month. Retailers blame the sales slips on subdued consumer spending due to rising unemployment rates, the report said.