American retailers in uptrend thanks to Back to School business
In August American consumer spending increased by 0.4 % against July, it is the fastest pace since last February. Retailers expect a better growth in the third quarter where a GDP Gross Domestic Product growth of 1.8 % on an annual basis is envisioned
Sales were boosted by the Back to School business. A person with school-age children is gearing up for the start of school and will spend an average of USD 688 (USD 603) reports the Wall Street Journal in a report.
Gap notes a 9 % increase in sales at same store and against August 2011. All three company’s brands Gap, Banana Republic and Old Navy – reported an uptrend, including a 12 % rise at Old Navy.
Macy’s reports same store sales rise of 5.1 % and across merchandise categories, geographies and channels.
Costco Wholesale Corp reports a 6 % same store sales, excluding fuel and foreign currencies and Stage Stores, a regional department store chain operating in small and midsize towns shows an increase of 6.5 % thus the strongest pace for the month since 2004 (!) and the management accredits the lack of discounts for its strong results.
Uneven job market, slow gains in wages and salary pushed many consumers unable or unwilling to sustain spending increases. Many American economists worry that consumer spending could slow in the coming months as rising gasoline prices divert more of their spending to basics. The saving rate based on consumer’s income after spending and taxes was 4.2 % in July and June but up from 3.5 % and 3.7 % from January to April. Wage and salary income increased 0.2 % in July. On the other hand private research group reports that consumer confidence fell to 60.6 points in August (July 65.4 points), it represents the lowest reading since November 2011.
Please refer also to TextileFuture’s Newsletter “Walmart study with interesting findings to US Back-to-School business” of August 1, 2012 www.textile-future.com