Retail sales show their first year-over-year growth in more than a year, according to two analyst organizations. While the growth reported by the two differed slightly, their conclusions were the same: The worst might be over.
U.S. chain store sales in September were up by 0.1% on a year-over-year same-store basis, the strongest reading since July 2008’s 3.3% year-over-year growth, reports the International Council of Shopping Centers Inc.
"Small as that gain was, it marked a significant turning point for the industry, as well as the start of the retail recovery," says Michael P. Niemira, chief economist and director of research for the Shopping Center Council. "To be sure, the retail recovery will be uneven and growth will be in spurts and fits, but it seems increasingly clear that it is recovery."
For October, ICSC Research expects comparable-store sales will be flat with last year's October.
The ICSC is a trade association. Its Chain Store Sales Trends report is based on a compilation of publicly available sales for 31 chain stores.
Consultants Retail Forward reported similar strength—and optimism. Retail Forward’s calculations showed 0.8% year-over-year growth, excluding Wal-Mart Stores Inc., compared to a 0.5% decline in September a year ago. Including Wal-Mart, sales were up 1.3%.
"September's numbers are a good sign that retail sales are on a path to recovery,” says Frank Badillo, senior economist at Retail Forward. “But it will be a slow, bumpy road as shoppers are cautious about easing the grip on their spending plans.”
Retail Forward’s ShopperScape survey in September showed consumers remaining cautious. 47% of shoppers said they plan to spend less in the next month, up from 38% in August, which was the smallest share of shoppers planning to cut back since February 2008.
However, shoppers’ plans for holiday spending have picked up since last month, the ShopperScape survey reports, and are only slightly worse than they were in September last year, which was just before the financial crisis worsened and caused shoppers to further tighten their plans. Retail Forward reports:
• 46% of shoppers say they plan to spend about the same on holiday gifts as last year. That’s the same percentage as September of last year.
• 40% plan to spend less on holiday gifts than last year, an improvement from the 43% that last month said they plan to spend less. However, that percentage is slightly higher than last year’s 37% and still sharply higher than two years ago.
• 9% plan to spend more on holiday gifts than last year, which is an improvement from the 7% that last month said they plan to spend more. At the same time, that’s down from 13% a year ago.
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