NEW YORK — Americans were shopping in October, but they spent at a slower pace than expected amid a barrage of bad economic news.
October revenue at stores open at least a year — an indicator of a retailer's health — rose 3.7 percent, according to the International Council of Shopping Centers' tally of 25 retailers. But 13 of 19 retailers missed Wall Street estimates for October revenue, according to Thomson Reuters, including big merchants like Costco, Macy's, Saks and Target.
The results reflect Americans' cautious spending habits. Consumers continue to worry about unemployment, a weak housing marketing and higher prices for food and fuel. 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 heading into the holiday shopping season, a period when merchants can make up to 40 percent of their annual revenue. But so far, consumers aren't giving them a clear sign.
"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.
The National Retail Federation, the nation's largest retail trade group, predicts winter holiday sales in November and December to rise 2.8 percent to $465.6 billion this year. That would be a 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 offer discounts and incentives to get people to part with their month during the season. Many retailers already are beginning to offer holiday discounts to draw shoppers in early. Some also are offering layaway. And others have announced expanding hours for the Black Friday, the day after Thanksgiving and the official kickoff to the holiday shopping season.
Although October results weren't as promising as retailers had hoped, revenue was impacted by unseasonably warm weather during beginning of the month and then a snowstorm at the end of the month. And most merchants reported revenue that was only slightly off from Wall Street estimates.
Costco Wholesale Corp.'s revenue at stores open at least a year climbed 9 percent in October, for instance, 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. Macy's Inc. posted a 2.2 percent increase in revenue at stores opened at least a year, which was below the 3.6 percent increase that Wall Street analysts had expected. The department store chain said revenue was hurt in part by the snowstorm at the end of the month that kept shoppers at home and warm weather during the rest of the month that kept them from buying winter clothes.
J.C. Penney said sales fell 2.6 percent in October, below the 1 percent increase that Wall Street expected. While sales overall were weak, women's clothing and accessories experienced sales gains in October, the company said.
Luxury retailers, which had benefited from brisk spending by their well-heeled shoppers, also showed a slowdown. Saks Inc. had a 1.8 percent increase, much lower than the 5.4 percent gain that analysts had expected. Saks said in a release that a change in a promotional event was one factor that hurt sales. A sales event in October 2010 included cosmetics and fragrances, but this year, it excluded those two categories.
Nordstrom Inc. had a 5.4 percent increase, below the 6.4 percent gain that Wall Street expected.