Monday, December 10, 2012

Retailers report increase in sales before holiday season

NEW YORK — Shoppers continued to spend steadily at retailers in October, from discounters all the way to the high end, suggesting consumer confidence heading into the holiday season.

Results tallied Thursday from the 18 national retailers tracked by Thomson Reuters showed an average increase of 2.7 percent in sales at stores open at least a year. The results largely excluded the effects of the hurricane.

Without the Rite Aid drugstore chain, though, that figure would have been 4.7 percent, above analysts' expectations of a 4.3 percent increase. Rite Aid saw a decline mainly because of a shift toward cheaper generic drugs.

''You're seeing solid single-digit numbers not just one month but consistently for the past few months," said Madison Riley, managing director at the retail consulting firm Kurt Salmon. "It reflects a steadily improving economy and therefore, steadily improving consumer confidence."

Still, all retailers' eyes were on the impact of Hurricane Sandy. Most retailers' fiscal October ended Saturday, so while a few stock-up trips made it into the October results, most of those, along with poststorm spending and the impact of store closures, were not included in October results.

Some analysts have said that consumers may direct their money toward home repairs in the storm's wake, rather than toward early holiday shopping. However, home improvement retailers and discounters might benefit from shopping for storm supplies.

Categories as various as department stores, discounters and apparel retailers all posted good results.

''What I find intriguing and encouraging is it's not isolated," Riley said, "but it's across the industry."

Stores for those on a budget continued to shine, like Costco, with a 7 percent increase, and the Nordstrom Rack division of Nordstrom, which posted its highest same-store sales increase of the year.

Retail analysts were already looking ahead to Sandy's effect on November sales. A Citi analyst, Deborah Weinswig, wrote in a research note that discounters could see a slight lift as people restock supplies after the storm.

Weinswig wrote that "the cost of cleanup and repairs from the hurricane could take money away from holiday purchases, which puts early holiday sales at risk."

But Riley, the retail consultant, said Sandy had arrived early enough to give people plenty of time to shop for holiday items.

''It's a timing issue, as opposed to, it's going to affect the holiday season," he said.

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