Americans showed their resilience in August as the down economy, the stock market and even a natural disaster were not enough to keep them from shopping.
Besides old worries about job losses, stagnant wages and falling housing values, shoppers had new troubles in August that were expected to keep them from heading to stores. They faced higher prices for everything from food to clothes. Wild stock market swings after the federal debt was downgraded fueled concerns about another recession. Then, Hurricane Irene hit last week in the middle of the busy back-to-school season.
Despite those factors, revenue in August was up 4.6 percent at stores open at least a year among 26 retailers _ a key industry measure _ according to the International Council of Shopping Centers. That's in line with the 4 percent to 5 percent that analysts predicted at the beginning of the month before all much of the events occurred.
"Retailers weathered a number of storms to turn into what's expected to be a solid back-to-school and August selling season," said Ken Perkins, president of Research Limited LLC.
Retailers' revenue results are closely monitored because consumer spending accounts for 70 percent of U.S. economic activity and is critical for a strong economy. This month's revenue gains underscore the changing spending habits of American consumers, who now are thriftier, but are willing to open their wallets to spend on basics, especially for their children. In August, for instance, many consumers were buying clothes and supplies for their children, giving retailers a needed boost during the second-busiest shopping season of the year.
"Consumers are looking beyond the noise and focusing on their own needs, and to some extent that is helping the retail sector and helping the economy," said Michael P.Niemira, chief economist at the ICSC. "When you have so many of these events, the consumer seems to be de-sensitized."
The results give a peek into consumers' moods, but many retailers, particularly ones that cater to lower-income customers, do not report on Thursday. Among the big retailers that did not report sales on a monthly basis are Wal-Mart Stores Inc., the world's largest retailer, and Home Depot, the nation's largest home improvement chain. Still, Thursday's reports are seen as a hopeful sign since many big retailers reported strong results against the odds.
Luxury chains eased worries that wealthy shoppers would pull back because of the wild swings in the stock market in August. Nordstrom Inc., for instance, had a 6.7 percent gain, higher than the 4.8 percent increase analysts had expected.
Other retailers, like Target Corp., posted solid results despite the economy as people shopped more for back-to-school supplies and hurricane-related items. Target's revenue at stores open at least a year climbed 4.1 percent in August, topping Wall Street's forecast of a 3.5 percent increase.
Target said that the monthly results, which were helped by an increase in average transaction size, also got a boost of one-half of a percentage point as shoppers in the East headed to its stores to buy groceries and other goods to prepare for Irene.
"While the pace of the economic recovery is uneven and uncertain, we are confident," said Gregg Steinhafel, chairman, president and chief executive officer of Target in a statement.
Even retailers that were hurt by some of the factors in August posted gains.
Macy's Inc., for instance, closed more than 100 stores in Manhattan over the weekend because the city's shutdown public transportation system was shutdown ahead of Hurricane Irene. The company said August sales fell by 1.5 percentage points because of that. Still, the retailer had a 5 percent gain in revenue at stores opened at least a year, above the 4.5 percent increase analysts were expecting.
"We expect the hurricane's effect on sales will be substantially offset as we move through September and the third quarter," said Terry J. Lundgren, chairman, president and chief executive in a statement.
Not everyone had gains, though. J.C. Penney Co. and Kohl's Corp., both reported unexpected declines as shoppers continued to veer toward the higher- and lower-end retailers instead those serving the middle-of-the-road customer.
And Gap Inc., which had long been struggling with a sales malaise, said revenue at stores opened at least a year fell 6 percent. The declines were across all its brands, including its namesake stores, Banana Republic and Old Navy. It started e-mailing 50 percent discounts to shoppers in the Northeast just for Thursday.
"Take a rain check. Something special for those who missed last weekend's offer due to Hurricane Irene," it beckoned.