Pier 1 (above) is among the retailers that have reported improvements in business in the past month. The Fort Worth-based retailer said same-store sales increased 9.9 percent in September.
(Emile Wamsteker/ Bloomberg News/ File 2003)
As holidays near, retailers showing signs of rebound
Pier 1 (above) is among the retailers that have reported improvements in business in the past month. The Fort Worth-based retailer said same-store sales increased 9.9 percent in September.
(Emile Wamsteker/ Bloomberg News/ File 2003)
WASHINGTON - From Intel Corp. to TJX Cos., the outlook for the US retail holiday season is becoming more optimistic.
Intel, the world’s biggest chip maker, cited stronger consumer demand in projecting Oct. 13 that its sales in the fourth quarter would be $9.7 billion to $10.5 billion, compared with a $9.5 billion average prediction in a Bloomberg News survey. TJX, the Framingham, Mass.-based operator of T.J. Maxx and Marshalls, raised its fourth-quarter comparable-sales estimate to a gain of 3 to 5 percent from an increase of 2 to 4 percent.
“Consumers’ bunker mentality is gradually giving way to more-familiar spending patterns,’’ says Michael Feroli, an economist at JPMorgan Chase & Co.
Rising sales would be good news for the economy as well as retailers. Consumption accounts for about 70 percent of gross domestic product, and more spending would help the recovery.
UBS Securities improved its outlook for third-quarter growth to 3.5 percent from 2.5 percent after last week’s report of September retail sales was higher than expected. GDP fell 0.7 percent in the second quarter; it was the fourth consecutive decline.
Helping to drive the improvement in consumer spending is a rebound in household wealth, which increased $2 trillion in the second quarter and about that much again in the third, according to Steven Wieting, managing director of economics at Citigroup Global Markets Inc.
Retail sales excluding automobiles and restaurants might advance as much as 1.5 percent in the holiday season as “frugal fatigue’’ sets in and shoppers open their wallets, says Marshal Cohen of NPD Group.
Sales dropped 4.2 percent a year earlier during what the International Council of Shopping Centers said was the worst holiday season in four decades.
Mike Niemira, chief economist for the trade group, said, “The retail-sector recovery is starting to unfold.’’
Sales at US retailers, excluding automobiles, climbed 0.5 percent in September. The increase followed a 1 percent gain in August, the biggest in six months.
The Standard & Poor’s 500 retailing index rose 72 percent between March 9 and Friday, as companies have beaten profit estimates by reducing costs and inventories and as sales trends began to improve.
Industry sales at stores open at least a year have outpaced analysts’ estimates in the past two months and are likely to do so again in October, said Ken Perkins, president of Swampscott, Mass.-based Retail Metrics Inc. Analysts are predicting a 1.4 percent gain this month, after a 1.1 percent increase in September and a decline of 2.3 percent in August.
Companies are trying to entice customers. Wal-Mart said it will offer a larger selection of toys priced at $10. Toys “R’’ Us Inc. is opening more than 80 temporary “Holiday Express’’ locations in shopping centers.
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