March 29, 2024

Retailers Attracted More Shoppers in September

September is considered a key month for retailers because back-to-school shopping, as well as bringing in sales, can indicate how the consumer is feeling about the future.

Some of the sales increases, though, seemed due to heavy promotions.

“One of the questions as we go into holidays, frankly, is where margins end up,” said Chris Donnelly, an executive in Accenture’s retail practice. “I think you’re going to see more aggressive discounting to make sure they capture as much of the holiday sales as they can. And you’ve seen it in some of the folks that reported today, where they said sales have gone up but margin and average selling prices have gone down a little bit.”

Generally, stores that go after a higher-end shopper fared better than those focusing on middle- and low-end customers.

The top performers among department stores was Nordstrom, where same-store sales rose 10.7 percent, beating estimates by more than five percentage points. There, shoppers seemed drawn to luxury purchases — Nordstrom said its top categories for the month were designer clothing, dresses and handbags.

Saks Fifth Avenue’s sales increased 9.3 percent, and there, too, people were drawn to non-essential items. Shoes, purses, jewelry and cosmetics were among its top sellers.

Macy’s, Kohl’s and Dillard’s came in a bit lower than the more plush department stores, at 4.9 percent, 4.1 percent and 3 percent respectively.

J.C. Penney had one of the few negative September results, with same-store sales down 0.6 percent. Analysts had expected growth of 0.6 percent. The company said Internet sales also dropped for the month because people were buying fewer expensive home-furnishing items.

J.C. Penney revised its profit outlook for the third quarter on Wednesday, saying that because of lower-than-expected sales, it was now expecting profit to be 10 to 15 cents a share, excluding one-time charges, versus the 15 to 20 cents a share it had previously projected.

The best performance over all was turned in by Costco, which, despite being a club store, caters to a well-off shopper. Costco’s same-store sales rose 12 percent, and its American sales, excluding gas, rose 7 percent.

Other than Costco and Nordstrom, the rest of the top five performers included Limited Brands, up 11 percent, and the teen stores The Buckle and Zumiez, up 10.3 and 10.1 percent, respectively.

On the bottom, Gap Inc.’s brands — Banana Republic, Gap and Old Navy — had a combined 4 percent drop in same-store sales, though analysts had expected about that. Smaller retailers Bon-Ton, Cato, Stein Mart and Stage Stores were also among the worst results.

Over all, according to MasterCard Advisors SpendingPulse, which tracks all forms of consumer spending, , 2011 was the best back-to-school spending season since 2006. SpendingPulse compared spending in July, August and September in school-related categories like children’s apparel and office-supply stores to earlier years,

“It’s a positive surprise that the American consumer is maintaining some degree of resilience here,” said Michael McNamara, vice president of research and analysis for SpendingPulse.

But Mr. Donnelly of Accenture warned that could soon change.

“There is a limit to how much consumers are going to be able to spend, because folks aren’t making any more — we just saw a couple of weeks ago wages are very low, real wages aren’t growing, employment’s not moving anywhere, the stock market’s got a lot of volatility — so it’s unclear how sustained this uptick in spending will last,” Mr. Donnelly said.

“As much as the consumer can surprise you on the positive side, like they did the last couple of months, they can also catch you on the negative side,” Mr. Donnelly said.

Article source: http://feeds.nytimes.com/click.phdo?i=5c086b7bb68964e26d58c8b57d14a2af

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