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October retail sales post slight gain

Major chains report a 1.6% rise over the same period last year, in line with expectations. Cost-conscious consumers continue to favor discount chains while sales in the teen apparel sector, a good indicator of discretionary spending, are sluggish.

November 04, 2010|By Shan Li, Los Angeles Times

Retailers posted a mild uptick in sales in October as consumers took a break from back-to-school splurging in advance of the holiday season.

Major chain stores reported a 1.6% sales increase in October compared with the same period a year earlier, in line with analyst expectations, according to Thomson Reuters' tally of 28 retailers released Thursday.

In a sign that cost-conscious shoppers are continuing to shop frugally, discount chains made a strong showing, posting a 3.8% year-over-year increase. Costco Wholesale Corp., which sells many household goods in bulk, reported a 6% gain; Target posted a 1.7% increase.

But the teen apparel sector was lackluster, with sales growth of 0.1%. Analysts had expected a 2.7% increase. Teens are considered a good barometer of discretionary spending because they usually aren't hampered by debt and bills.

Industry watchers blamed slow fall merchandise sales on a warmer-than-normal month, which prompted stores to increase promotional activity to lure in shoppers.

October also marks the second month this year to face difficult year-ago sales comparisons.

Even in the best years, October is traditionally a slow month for merchants as they gear up for the holidays, the retail industry's most important season. But the tepid results cast some doubt on whether consumers are ready to spend again after two previous ho-hum Christmases.

Results are based on sales at stores open at least a year, known as same-store sales and considered an important measure of a retailer's health because it excludes the effect of store openings and closings.

shan.li@latimes.com

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