Gift Cards and Balmy Weather Stoke January Retail Sales

On February 14, the U.S. Commerce Department delivered a valentine to the nation's economy. At 8:30 a.m., the agency released a monthly sales estimate for January showing that retail and food services sales were up 2.3 percent from December 2005 and had risen 8.8 percent over January 2005. Estimated January sales were $365.4 billion, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.

Economists cited two factors for the sales increase: warm weather and gift cards. This January was the warmest on record, according to the NOAA National Climatic Data Center in Asheville, North Carolina, and in the fair weather consumers returned to stores to redeem billions of dollars worth of gift cards. While the cards were purchased in the weeks and days leading up to the holidays, it is their redemptions that are recorded as sales.

According to National Retail Federation (NRF), retail industry sales for January (which exclude sales of automobiles and transactions at gas stations and restaurants) rose 7.6 percent over January 2005, and 2.0 percent seasonally adjusted over December 2005. "While our 2006 outlook for the retail industry remains cautious, consumers responded well to the popularity of gift cards, mild winter weather, and aggressive clearance sales," commented NRF Chief Economist Rosalind Wells in a statement. NRF also noted that for the month of January the sporting goods, hobby, and book and music stores category saw a gain of 6.5 percent over January 2005.

In tune with the national trends, Book Sense Gift cards showed strong January sales, with sales redemptions up 55 percent over January 2005.

"News reports this week make clear that economists believe that one key reason for these strong January retail sales are gift cards," said ABA CEO Avin Mark Domnitz. "Given the estimates of such strong sales in book and music stores, we hope that independent booksellers who are not now offering their customers gift cards recognize that this is an item that can significantly help their businesses."

Book Sense gift card FAQs, card designs, and other helpful information is available at www.bookweb.org/read/6303. Questions may also be addressed to ABA's Jill Perlstein [(800) 637-0037, ext. 6642; [email protected]] or Linda Ford [ext. 6644 or [email protected]].