US consumers hit the shops in August in higher-than-expected numbers, raising optimism among retailers planning for the holiday season. Economists already knew that the US government’s $3bn “cash for clunkers” scheme had boosted car sales last month, but retail sales were strong across the board.
Buyers for major department stores say privately that they are planning for a bumper holiday shopping season, and Toys “R” Us, the children’s retailer, said that it would open temporary stores at 350 locations across the US. In an unusual move for a retailer, these “pop up” stores will open in vacant properties at 80 malls or high streets, and inside its sister chain, Babies “R” Us, only to disappear again in January.
Last year’s holiday season was the worst for retailers in 40 years by some measure, and consumer surveys have not so far predicted a strong rebound this year. But some chains have reported an upturn in spending in recent weeks, particularly over the Labour Day holiday.
Best Buy, the biggest consumer electronics chain in the US, missed its profit forecast for the second quarter of the year, but raised its outlook for the rest of 2009, saying that sales trends were improving , customer traffic was stabilising and it was also winning market share due to the bankruptcy of its main rival Circuit City earlier this year.
The August figure for retail sales caught Wall Street by surprise. Economists had expe ted a 2% jump, on an annualised basis, but the commerce department said that sales in fact grew 2.7%. Car sales were up by 10.6% due to the government scrappage scheme, but there were also gains of more than 1% in electronics, general merchandise and in the hobbies sector, which includes sporting goods, books and music.