March sales at Costco, Nordstrom bode well for large retail

Apr 7, 2011

A surprisingly solid March – that's the consensus about last month's retail sales.  Despite cold weather and climbing gas prices, shoppers spent a lot more money last month than they did in March a year ago.

Costco and Nordstrom are among the local companies that are benefiting.

  • Costco reported retail sales up by about 13 % at stores open at least a year, thanks in part to discounted staple items such as milk and gasoline.  
  • Nordstrom showed sales up more than 5% in March compared to the same month a year ago.

A commitment to customer service is at the heart of both chain's successes. But Nordstrom deserves credit as the originator of  the customer-centric business model on a large scale. It started decades ago in Nordstrom's shoe department, which has been known since its founding for taking back just about anything any customer wanted to return, no questions asked. 

The policy caused the upscale Seattle department store some big losses during the recession, says independent analyst Jennifer Black.

"During that time, they had massive returns.  And some of the merchandise was probably 3 or 4 years old.  I mean, they had people pull out anything in their closet with tags and bring it back. Because people were so scared, " Black says. 

But she the risk of taking back anything it has paid off in terms of keeping customers loyal.  And now they're coming back, delivering same store sales that are more than 5.1% higher compared to a year ago.

That's not as big a boom as some discount retailers like Costco saw in March…but Black thinks their sales will keep climbing for the rest of the year.

"Nordstrom is in a really great position," she says, adding that the late occurrence of Easter in this year's calendar stands to give April sales an extra boost. 

She says it's a combination of smart fashion picks, effective inventory management and deployment of new technology that improves customers' experience and helps shoppers get what they want, right away.