May Retail Sales Were Better Than Expected
Wal-Mart Proves To Be Exception
Wal-Mart is feeling the pinch from higher gas prices, with same-store sales missing analysts' expectations.
(By Paul Sakuma -- Associated Press)
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Friday, June 2, 2006
NEW YORK, June 1 -- Consumers apparently shook off their worries about higher gas prices during May, shopping with enthusiasm at apparel stores and malls and giving many retailers better-than-expected results. A big exception was Wal-Mart Stores Inc., whose low-income consumers are feeling the biggest financial squeeze from $3-a-gallon gas.
But the outlook for consumer spending remained uncertain as shoppers face some big purchasing decisions: whether they should spend on summer vacations, for example, or buy more apparel and other items.
"The gas drag is a problem for some, but not a broad drag," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. But he predicted that with mounting financial pressures, "there is likely going to be a second-half [consumer spending] slowdown."
Based on sales reports released by the nation's merchants Thursday, May's winners cut across all sectors, included Target Corp., J.C. Penney Co. and AnnTaylor Stores Corp. The laggards included Gap Inc. and Sharper Image Corp., which continue to struggle with their merchandising strategies.
The International Council of Shopping Centers sales tally of 52 retailers rose 4.1 percent in May, better than the 3.2 percent gain expected. The tally is based on sales at stores opened at least a year, known as same-store sales. May's sales pace is in line with the 4.2 percent gain averaged from January through April.
Wal-Mart, however, is already starting to feel the pinch from higher gasoline prices. The discounter reported a 2.3 percent gain in same-store sales. Analysts surveyed by Thomson Financial expected a 2.9 percent gain.
"Fuel prices continue to be a top concern for our customers," Tom Schoewe, executive vice president and chief financial officer, said in a statement. "We believe that our customers are consolidating their store visits and focusing their spending on consumables -- a trend that we have been seeing since Easter."
Meanwhile, Target had a 5.7 percent gain in same-store sales, better than the 4.8 percent expected.
