US shoppers continue to tighten purse strings

| October 9, 2008 | 0 Comments

US shoppers tightened their belts even further in September after retail sales for the month were down.

Even discount stores including Wal-Mart, the world’s largest retailer, and wholesale club operator Costco, both reported strong sales, but failed to meet Wall Street estimates.

Wal-Mart reported a 2.4% gain in like-for-like sales, which was slightly under analysts forecasts of 2.5%. Sales at Costco were up 7% but also below market expectations.

Department store group JC Penny suffered due to the economic slowdown and reported that same-store sales were down 12.4% against the same period last year.

Meanwhile, luxury stores such as Neiman Marcus Group and Saks have suffered due to shoppers cutting back on luxury goods and are sticking to essentials. Saks reported that sales were down 8.3%.

American Eagle Outfitters fell by 6%. Online retailer Target Corp also reported that same-store sales were down 3%.

According to research company RetailMetrics, the results are not a significant comfort as the holiday period nears. The company added that consumers haven’t been this worried since the recession in 1991.

The International Council of Shopping Centres said September sales rose 1.7% but this is well below the 2.3% average growth since the beginning of the retail industry’s financial year in February.

It is feared that spending could deteriorate even further as the problems on Wall Street further flow through to the economy, according to analysts. Over the coming months, job losses are expected to rise adding more pressure onto consumers, and while the credit markets remain frozen, consumers will find it even harder to obtain loans.

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