Shoppers at the Third Street Promenade in Santa Monica. (Kevork Djansezian / Getty…)
Shoppers hit the malls for back-to-school shopping in August and handed retailers a healthy boost despite continued worries about the job market and a sluggish economy.
Major chain stores posted a 3.6% sales increase in August compared with the same month a year earlier, outpacing analysts' expectations of a 2% rise, according to Thomson Reuters' tally of 16 retailers.
"Consumer spending increased for the first time in three months," said Chris Christopher, an economist at IHS Global Insight, "providing evidence that after hunkering down for two consecutive months there are signs of life on the consumer front."
Top performers were a mixture of high- and low-end stores. Luxury department store Nordstrom led the way with a strong 21% jump. San Francisco-based Gap Inc. continued to show signs of a turnaround by posting a 9% increase. Discounters fared well, with off-price retailers Ross Stores Inc. and TJX Cos. both reporting a strong 8% increase. Limited Brands, parent company of Victoria's Secret and Bath & Body Works, also saw sales rise 8%.
Other retailers posted weak results. Struggling teen clothier Wet Seal, which recently ousted its chief executive and is facing a discrimination lawsuit, said sales plummeted 18.3%.
August has traditionally been the core of the back-to-school shopping period, the second-most-important time of the year for retailers (after the winter holidays), accounting for more than 10% of the industry's annual sales. But this year many parents and kids say they are waiting until after school starts to shop in order to pick up the best deals and buy the right trends.
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 stores' openings and closings.
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