Posted on: Friday, November 5, 2004

Sales brisker at U.S. retailers

Advertiser News Services

The outlook for the holiday season brightened yesterday as many of the nation's retailers reported an improvement in sales in October.

Sales at U.S. retailers including Macy's owner Federated Department Stores Inc. and Nordstrom Inc. rose 4.1 percent in October, signaling sustained growth in the face of record energy prices.

Sales at stores open at least a year gained the most in five months, said the New York-based International Council of Shopping Centers, which tracked results from 75 chains. Wal-Mart said sales increased 2.8 percent, the third consecutive month under 3 percent, as gasoline prices surged 28 percent and crimped spending.

Sales in November and December, the biggest shopping period, will rise 3 percent to 4 percent, according to an ICSC forecast, in line with last year's results.

"We're seeing some traction in the industry going into the holiday season," ICSC economist Michael Niemira said. "You like to see some kind of firming in the underlying demand."

Wal-Mart said November sales will rise 2 percent to 4 percent. Federated expects sales to be unchanged or up 2 percent in November and to rise as much as 3 percent in December.

High energy prices may be making some retailers cautious about the holidays, Niemira said.

"You don't know what at this point to expect," he said.

Ken Perkins, an analyst at RetailMetrics LLC, a research firm in Cambridge, Mass., said, "There was definitely more broad-based growth across the apparel group. But the low-end consumer continues to be hurt on two fronts — jobs and wage growth and higher energy prices."

"This is a little more encouraging as we head into the holiday season, though it is not a harbinger for a stellar shopping season."

Even in more secure economic times, it's hard to tell from October sales how the holiday season will fare — whether consumers will shop enthusiastically from the start or put off buying until late December and force retailers to slash their prices. October is the fifth smallest sales month for retailers and a clearance month when companies begin preparing for the holiday season.

With the current uncertainty about jobs and energy bills, many storeowners are uneasy about the holidays.

Retailers are worried because there's no must-have item that will bring throngs of customers to the stores — although there are plenty of electronics items such as flat-screen TVs and miniature iPods that are expected to do well.

One bright spot, high-end stores again reported robust sales.

Neiman Marcus Group Inc. had a 13.6 percent gain in same-store sales, surpassing the 8 percent Wall Street expected. Saks Inc. had a 4.4 percent gain in same-store sales, better than the 2.8 percent estimate.

Bloomberg News Service and The Associated Press contributed to this report.