New figures show that retail sales improved in October, recovering from their September freefall.
Salomon Smith Barney’s index of sales at fifty stores open for at least twelve months rose 1.5% last month, compared with only 0.5% in September. However, this was slower than October 2000’s 2.5%.
Faring particularly well were discount stores such as Wal-Mart and Costco Wholesale, which saw year-on-year sales rise 6.7% and 6% respectively. In contrast, clothing chain Gap saw sales tumble 17%, while upmarket department store chains Saks and Neiman Marcus Group suffered respective falls of 6.4% and 9.7%.
Salomon Smith Barney analyst Richard Church said the figures “surprised us positively,” but, he added, “consumers continue to be price-and value-conscious, and less comfortable with spending on more discretionary purchases”.
The focus on value suggests that it will not be an extravagant Christmas for many shoppers, but some analysts are predicting a holiday shopping bonanza as retailers slash prices early. According to Credit Suisse First Boston’s Richard Baum, in recent years more sales have been made in the last five days before Christmas than in the five after Thanksgiving – “but no retailer can wait until the last five days, so if they see sales not happening early, prices will come down. It’s a matter of who’s going to blink first.”
News source: Wall Street Journal