Business
Many Retailers Report September Sales Declines
A late Labour Day and delayed school openings offered some relief to merchants in September, helping to boost sales above Wall Street expectations. But spending still remains tepid as consumers focused on necessities amid job worries and tight credit.
Still, most stores posted sales declines, though smaller than in recent months, even as their figures are compared with last September when business plummeted as the financial meltdown ballooned.
As stores announced their results Thursday, J.C. Penney Co., Macy’s Inc., and teen retailer Wet Seal Inc. reported smaller-than-expected declines in sales at stores open at least a year. The measure is considered a key indicator of a retailer’s health.
Limited Brands Inc., which runs Victoria’s Secret and Bath & Body Works, and accessories chain The Buckle Inc. both posted increases for the month.
According to a preliminary tally by Thomson Reuters, nine stores beat Wall Street estimates, while four retailers’ results missed expecations.
Industry worries remain high heading into the holiday shopping season because shoppers, who were afraid to buy a year ago, are now grappling with rising job losses, reduced hours or unavailable credit. The unemployment rate is now 9.8 percent, up from around 7 percent last holiday season.
Credit also remains tight. A report released Wednesday by the Federal Reserve, shows that consumers reduced their borrowing for the seventh straight month in August as households cut spending and banks reduced credit card limits.
“Consumers remain under pressure on multiple fronts,” said Ken Perkins, president of retail research firm Retail Metrics. “I don’t think consumer spending is going to see a substantial uptick. Shoppers are concerned about rebuilding their balance sheets.”
In this climate, purveyors of fashion and nondiscretionary items continue to struggle with sluggish sales, while low-price stores benefit from shoppers switching to cheaper stores and brands.
Still, the tone was better in Thursday’s reports, as several merchants including J.C. Penney, American Eagle Outfitters Inc. And TJX Cos. Raising their profit outlook based on their better-than-expected performance.
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