September 6, 2010 by staff
Costco Locations, NEW YORK – AP – American shoppers, taking advantage of rebates and tax holidays, open their wallets a little more for the expense of returning to school compared with last year, which some retailers better-than-expected gains in August.
The results provide a little hope for recovery in the middle of a lot incessant bad news of falling house prices and high unemployment, which have pointed to the stagnant economy and create negative expectations for the holiday shopping season back to the school. However, the retailer gains mask underlying weakness in consumer spending, as it is being compared with a decrease from a year ago still abound and worries about the holiday season.
Buyers remain selective and are focusing on needs, a trend that is expected to continue at least until the holiday shopping season.
The International Council of Shopping Centers, index of 31 major retailers rose 3.2 percent in August after a 2.8 percent gain in July. August figure was slightly better than the forecast increase of 3 percent, but compared with a fall of 2.0 percent a year ago.
The figures are based on revenue at stores open at least a year considered a key measure of retail health because it excludes the effects of the stores that opened or closed during the year.
In fact, spending on nonessential items, like many fashions still below 2008 and are almost equal to last five years, according SpendingPulse MasterCard Advisors, whichanlyzes all transactions including checks.
“We will finish with a season well back to school, but is being compared with two seasons back to fall back,” said Michael P. Niemira, chief economist at International Council of Shopping Centers. “The retail sector in general is not seeing enough (sales) of elevation to bring the entire industry.”
As retailers reported results Thursday, Costco Wholesale Corp. reported a robust profit, driven by higher gas prices and international revenue improved. Limited Brands Inc. and Macy’s Inc. also had solid revenue increases. However, a number of clothing stores like Aeropostale Inc. and Gap Inc. had weak results. Results Target Corp. ‘s was below expectations.
Retailers, including many young traders, aggressively promoted jeans and other fashions in July in their attempts to lure nervous buyers in stores. Tax-free holiday in nearly 20 states also helped attract buyer’s customers. But still focused on the replenishment of items and relentless heat depressed appetite buyers “to purchase items fall.
Monthly survey from The Conference Board, released Tuesday, showed the guests feel a little more optimistic than in July in August – but no more than a year ago. And there is no reason in the light to feel better soon.
Home sales are plunging, and consumers are saving more and spending less than the rate of unemployment remains stuck at nearly 10 percent. The Labor Department is expected to report fourth consecutive month of gains in employment in the private sector tibia on Friday.
“Consumers are buying what they absolutely need and are being very careful about this,” said retail consultant Emanuel Weintraub.
Costco said revenue at stores open at least a year rose 7 percent in August, boosted by higher gas prices and international revenue improved.
This increase exceeded the 4.2 percentanlysts expected, according to Thomson Reuters. But the fourth quarter and full year earnings missed Wall Street expectations.
Target said sales of items for back to school and food helped revenue at stores open at least an annual increase of 1.8 percent in August. But the results of the retail chain fell just below expectations of an increase of 2 percent. Food, health and beauty products were the main sellers. Electronics and home furnishings were weaker.
Wal-Mart Stores Inc. and no revenue reports at stores open at least a year on a monthly basis.
Limited, operator of Victoria’s Secret and Bath and Body Works, reported growth of 10 percent in August. Analysts polled by Thomson Reuters, on average, expected the figure to rise by 7.3 percent.
Gap said its turnover rose password was flat in August, helped by improved results at its Banana Republic chain.
Among department stores, Macy’s said revenue rose in August, when shopping for back to school helped the company top Wall Street forecasts. Proceeds from locations open at least a year rose 4.3 percent during the month.
J. C. Penney Co. had an increase of 2.3 percent. In general, men and children’s clothes were the highest performing divisions of goods during the month. Kohl’s Corp. ‘s profit reoprted than-expected 4.5 percent on strong sales of home goods for men, and footwear.
Among teen retailers, Aeropostale Inc., hurt by aggressive discounting competitor Abercrombie & Fitch Co., struggled with a drop of 1 percent, missinganlysts’ expectations of an increase of 1.2 percent. The company said it had better results at the peak of the regions back to school, showing the buyers are buying closer to when they need the items.
Abercrombie reported an increase of 6 percent, slightly aboveanlysts’ estimates of an increase of 5.9 percent. But what helped drive business has been a generous 40 percent discount,anlysts said.
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