October retail sales up 3.4% at major chains, less than expected
The nation's retailers recorded a moderate increase in sales last month as consumers reined in their spending after splurging on back-to-school shopping and cautiously sized up the coming holiday season.
On Thursday, major chain stores reported a 3.4% sales increase in October compared with the same month a year earlier, according to Thomson Reuters' tally of 23 retailers. The results were below analysts' expectations.
"Some sectors cooled a little bit in October," said Michael McNamara, vice president of research and analysis at data service MasterCard Advisors SpendingPulse. Sales were hampered by unusually warm weather early in the month as well as by heavy snowstorms in the Northeast.
All told, about two-thirds of retailers reported sales that fell below expectations. The worst showing was by teen apparel chain Wet Seal Inc., based in Foothill Ranch, which posted a 9.7% decline. Struggling apparel giant Gap Inc., operator of the Gap, Banana Republic and Old Navy chains, saw sales drop 6%.
The discount sector had a relatively strong showing as cost-conscious shoppers sought bargains. Costco Wholesale Corp. posted a 9% gain. Cheap but trendy Target Corp. reported a 3.3% rise.
The percentage changes are based on sales at stores open at least a year, considered an important measure of a retailer's health because it excludes the effect of store openings and closings.
October is a slow time for merchants as they gear up for the holidays, so is not a good predictor of future consumer spending, analysts say. The National Retail Federation, a trade group, forecasts that sales will rise 2.8% in November and December compared with a year earlier.
— Shan Li
Photo: A shopper walks by a window display at Stanford Shopping Center in Palo Alto. Credit: Paul Sakuma / Associated Press