NEW YORK – Americans proved in September they are willing to spend, as long as the price and the product are right.
Stores including Abercrombie & Fitch Co., Limited Brands Inc. and Macy’s Inc. posted strong September sales figures, helped by customers lured to malls by back-to-school discounting. That strength was partly offset by erratic weather in the last week of the month, including a heat wave on the West Coast and tropical storms on the East Coast.
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The results are a positive sign that shoppers will be willing to spend during the upcoming holiday season.
“I think the doom and gloom that many of us anticipated for the quarter appears unfounded,” said Stifel Nicolaus analyst Richard Jaffe. “Credit goes to the U.S. consumer and the U.S. retailer for sleuthing out what she wants and giving it to her.”
The International Council of Shopping Centers’ index of September retail sales rose 2.6 percent, near the low end of its forecast that ranged from 2.5 to 3 percent growth.
But the number is stronger than it appears, because retailers were up against year-ago results that were the first positive numbers in a year, making comparisons more difficult.
Mike Niemira, ICSC director of research and chief economist, said he expects holiday sales to rise 3 percent to 3.5 percent, slightly better than results in September, which is the third largest sales month in terms of volume.
Still, results remain moderate compared to pre-recession performance. Analysts do not expect any major sales surge until unemployment, housing and consumer confidence sectors markedly improve. Currently, employers aren’t hiring enough to bring down the 9.6 percent unemployment rate.
“Our holiday projections are not for a gangbuster season,” Niemira said. “I suspect we’ll see something a little better than the September performance during the holidays, but not dramatically better.”
A hot August and late Labor Day helped push more back-to-school sales into the month, and a surge in the stock market might have eased shoppers’ minds. The S&P 500 rose 9 percent during the month.
“I think retailers are pleasantly pleased by the strength of the back-to-school season,” said Ken Perkins, president of research firm RetailMetrics. “It’s turning out to be a solid month, which should bode well for the holiday shopping season.”
Top performers were stores that offered attractive prices, or unique items that consumers feel are “must have.”
“There is a consumer ability to spend, but they need a desirable product, great value or shopping experience that compels them to purchase more than they intended,” said Joel Alden, a principal in the retail practice at A.T. Kearney, a management consulting firm.
In the teen sector especially, discounts were steep, particularly at Aeropostale, which offered promotions such as buy-one-get-one-free promotions for jeans and camisoles. Abercrombie & Fitch offered deep markdowns as well.
Discounts picked up at stores such as Banana Republic, Urban Outfitters and Talbots, said BBDO Capital Markets analyst John Morris.
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