Shoppers are coming out of hibernation, but that doesn't mean the holiday season won't be a bear. October retail sales were up around 2 percent -- a little better than analysts had expected, and with new pockets of growth. But the reports were wildly uneven. Tallies of comparable-store sales had almost as many winners as losers.

A wrapup from the International Council of Shopping Centers (ICSC) showed every segment turned positive in October, except for the still-struggling department stores, where comparable-store sales (also called same-store sales, or sales for stores open a year or more) were down 1.1 percent. But even one part of that segment had an unexpected improvement: Luxury department stores sales were up 1.8% on a same-store basis last month.

That's their first showing on the plus side since May of 2008, noted a report by ICSC Chief Economist Michael P. Niemira. "The improvement in the stock market has had a significant impact on the affluent shopper's willingness to spend," Niemira wrote. He's now expecting total same-store sales will grow 5 percent to 8 percent in November.

But the results varied considerably. Within categories, some players beat expectations, while others fell short. A tally from Thompson Reuters showed 48 percent of the 30 national chains it analyzed met or beat sales expectations, while 52 percent missed. Several retailers reported sales were sailing along in the first half of the month, but slowed down in the last two weeks. Many blamed that on warm, wet weather in late October that scared off customers.

"Cautious Behavior"


Shoppers are coming out of their cocoons, but they're keeping spending in check. Several retailers, including Target Corp. (TGT), Aeropostale Inc. (ARO) and the Hollister unit of Abercrombie & Fitch (ANF) said they rang up more transactions during the month than the same time last year, but the dollar value per transaction was down.

"Households remain focused on shopping for needs, and this kind of cautious behavior will restrain the sales improvement we can expect in the coming months," says Frank Badillo, senior economist at consulting firm Retail Forward.

Retail Forward's research shows the percentage of shoppers who plan to hold down their spending in the short term dropped slightly, to 45 percent in October from 47 percent in September, but those planning to boost it is holding at 9 percent, compared to 8 percent last October, in the depths of the economic free-fall.

Prowling for Good Deals

Indeed, discounters were more likely to see improvements. Costco Wholesale (COST), which showed a 5 percent increase in comparable-store sales, was among the few retailers reporting that both traffic and transaction size increased in October. And TJX (TJX), the parent of discounters Marshalls and TJ Maxx, continued to show outsize growth. Its comparable-store sales were up 10 percent.

Those results led it to announce that it expects to meet or beat its recently raised third-quarter estimate of 77 cents to 79 cents in earnings per share, up more than 44 percent compared to the same period last year.

"Consumers are being attracted by what the prices are," Jharonne Martis, director of consumer research for Thomson Reuters, told Reuters. "Unless they feel that they're getting a good value for their money, they won't shop." So more folks may be roaming the malls and hitting the sale aisles, but that's not adding up to a whole lot yet for retailers overall.


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