NEW YORK — Americans were shopping in October, but they were spending at a slower clip than expected as they faced a barrage of bad economic news.
October revenue at stores open at least a year — an indicator of a retailer’s health — rose3.7 percent from the same month a year ago, according to the International Council of Shopping Centers’ tally of 25 retailers.
But October’s increase is weaker than the 5.5 percent revenue gain in the prior month. And 13 of 19 retailers missed Wall Street estimates for October revenue, according to Thomson Reuters, including big merchants such as Macy’s, Saks and Target.
The results reflect Americans’ cautious spending habits. Consumers continue to worry about the challenges of the weak economy, including high unemployment and a weak housing market.
At the same time, those who have jobs have paid down their debt since the recession and are starting to feel more comfortable about spending. Retailers hope they’ll continue to do so during the holiday shopping season, but consumers aren’t giving them a clear sign they will.
“The softer trend in my mind raises questions of whether this is a new trend or a temporary respite before it gets back to stronger spending,” said Michael P. Niemira, chief economist at the International Council of Shopping Centers.
Uncertainty over jobs was underscored by a massive crowd that turned out in Murfreesboro, Tenn., this week as auto industry job applications were taken at a local hotel.
Robert Darnell of Columbia, Tenn., had lost his job at a pencil plant more than two years ago. Since then, he has been searching for work every week.
This week — with his unemployment checks about to run out — he was one of an estimated 5,000 people who stood in a line that wrapped around Embassy Suites in Murfreesboro for a job fair held by Yates Services, a maintenance contractor for the Nissan plant in Smyrna, Tenn., where the Asian automaker has an assembly plant.
“I think I’ve got two checks left,” said Darnell, 42, who said his job was shipped to Mexico.
Yates Services plans to hire 1,600 full-time workers for Nissan for part-sorting, production line and forklift positions. The jobs will pay an average of $12.50 an hour with benefits starting after 90 days.
Mixed forecasts ahead for holidaysThe National Retail Federation, the nation’s largest retail trade group, predicts revenue in November and December will rise 2.8 percent to $465.6 billion this year. That would be smaller than the 5.2 percent increase last year, but higher than the average over the last 10 years.
“Consumers are regrouping and retrenching and saving their pennies for the holiday season,” said Ken Perkins, president of Retail Metrics, a research firm.
But stores likely will have to work hard to get people to part with their money during the season.
Many retailers already are beginning to offer holiday discounts to draw shoppers in early. Amazon.com launched a sale this week that included such deals as 10-carat white gold diamond-studded earrings marked down to $270 from $1,199.99.
“This is an effort to stimulate the holiday season to be longer and longer,” said Janet Hoffman, managing director of Accenture’s global retailing practice.
Retailers are doing more than discounting. Some, such as Wal-Mart Stores Inc., are offering to match the cheaper prices consumers find at competitors. And other stores, including Target and Macy’s, this week have announced expanded hours on Black Friday, the day after Thanksgiving and the official kickoff to the holiday season.
Retailers have some reason to be optimistic that the incentives will work.
Although October results weren’t as promising as retailers had hoped, revenue was affected by unseasonably warm weather during the beginning of the month and then a snowstorm at the end of the month in a portion of the country. And most merchants reported revenue that was only slightly off from Wall Street estimates.
Wholesale club operator Costco Wholesale Corp.’s revenue at stores open at least a year actually climbed 9 percent in October, slightly lower than the 9.2 percent increase analysts surveyed by Thomson Reuters had predicted. And Limited Brands said revenue at stores open at least a year rose 6 percent in October, down from analysts’ estimates of 6.2 percent.
A few merchants reported much more disappointing results. Target’s 3.3 percent increase was below the 4.2 percent gain expected by Wall Street.
Macy’s Inc. posted a 2.2 percent increase in revenue at stores opened at least a year, which fell short of the 3.6 percent increase that Wall Street analysts had anticipated.
