U.S. consumers are becoming a little less guarded about spending money, based on the latest retail sales figures, but no one’s yet predicting a breakout, holiday-shopping season ahead.
U.S. chain-store sales rose for the first time in more than a year in September, and sales tallies at seven in 10 retailers reporting monthly figures exceeded expectations, Swampscott, Massachusetts-based market-research firm Retail Metrics reported today. Two factors behind the 1.1% increase last month: A later Labor Day pushed more back-to-school sales into September, and cooler-than-normal weather sent shoppers in northern climes out sooner for fall clothing.
As they have since the start of the year, retailers offering lower-priced goods continued to reap the benefit of attracting discriminating, price-conscious shoppers. Teen-apparel retailer Aeropostale, which has been promoting less-expensive clothing, saw sales rise 18% at stores open at least a year and raised its profit projection for the third quarter.
Still, the picture is by no means rosy. The Nielsen Company estimates sales this holiday season will come in only slightly higher than last year, rising 0.03 percent to $90 billion. And the National Retail Federation is less optimistic , predicting sales for November and December will actually drop 1% from a year earlier, vs. a 3.4% average, annual holiday sales growth over the last decade.
While the economy continues to show signs of improvement, two key drivers in retail-sales growth - employment levels and availability of credit - remain weak.
With nationwide unemployment nearing 10%, many Americans are in survival-spending mode, with supermarket chains being the only retailers they’re patronizing. Bank’s cautiousness on consumer lending is hitting sellers of big-ticket items - from furniture to luxury goods - particularly hard, which in turn has a deflating impact on total retail-sales volume.
The U.S. Labor Department, on the first Friday of each month, reports the previous month’s jobless rate. The biggest influence on consumer spending this holiday season may well be the unemployment rate reported on Dec. 4 - and which side of 10% it lands.
