Shoppers cautiously pushed up spending in May
NEW YORK (AP) - Americans loosened their purse strings in May to take advantage of bright new styles and Mother's Day promotions.
Major retailers including Target Corp., Macy's Inc. and Limited Brands Inc. all posted bigger-than-expected gains from a year ago. The modest but healthy gains followed a dismal showing in April, when retailers on average posted their weakest performance since November 2009.
"The pent up demand is continuing to pour out a little," said Ken Perkins, president of Retail Metrics LLC, a research firm. "I wouldn't say it's happening in droves. But consumers are updating their wardrobes."
In particular, Perkins said shoppers are being enticed after the long recession by the colorful new styles that many retailers are rolling out. That's in contrast to the gray and black color palettes that dominated so many store windows a year ago.
Only a handful of retailers representing roughly 13 percent of the U.S. retail industry report monthly figures based on stores open at least a year, which is a key measure of health because it excludes the impact of newly opened and closed stores. But the figures nevertheless offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.
Although modest, the gains in May are considered positive sign because retailers were largely up against strong comparison results from a year ago when the figure on average rose 5.4 percent, according to the International Council of Shopping Centers.
A variety of retailers posted large gains on Thursday. Target, a discounter based in Minneapolis, said its revenue at stores open at least a year was up 4.4 percent. That's above the analyst estimate of 3.5 percent, according to Thomson Reuters. Limited, a women's fashion chain based in Columbus, Ohio, said its sales were up 6 percent, which topped the 4.7 percent analysts expected.
Costco Wholesale Corp., which is based in Issaquah, Wash., said revenue at stores open at least a year was up 4 percent. That was shy of the 4.3 percent analysts expected, but lower gas prices and unfavorable currency exchange rates dragged down the number. Perkins of Retail Metrics also noted that the wholesale club operator had a particularly high hurdle to meet, given its 13 percent gain from a year ago.
Macy's, which runs Macy's and Bloomingdale's department stores, reported its results a day earlier. The retailer, which is based in Cincinnati, said on Wednesday that its revamped offerings pushed up the measurement 4.2 percent, which was higher than the 4 percent Wall Street expected.