Consumers Buying, But Keying in on Bargains

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October 6, 2011 by   Comments Off on Consumers Buying, But Keying in on Bargains

September offered the latest sign that Americans will shop, but only when they think they’re getting a deal.

The Associated Press reported that the International Council of Shopping Centers said today (Oct. 6) that revenue rose 5.5% in September, with several retailers including Target and Kohl’s posting strong gains as consumers snagged discounted merchandise.

The revenue increases, which beat Wall Street estimates, leave uncertainty about whether retailers will have to offer more bargains to lure consumers to buy during the winter holiday shopping season. Retailers can make up to 40% of their revenue during the period, which runs from November through December.

“This past month shows consumers are rewarding retailers who are matching great merchandise with great deals – a clear signal to expect more and earlier promotions as we enter the holiday season, ” said Sherif Mityas, a partner in the retail practice at A.T. Kearney, a global management consulting firm.

The revenue gains at stores open at least a year — a key indicator of a retailer’s health — come as merchants look for a sign of how consumers will spend during the winter holiday season.

Though many retailers reported better-than-expected results in September, concerns linger that shoppers who are fretting about high unemployment, a weak housing market and turbulent stock markets, will continue to seek out bargains that could significantly eat away at retailers’ profits.

Wealthy shoppers seem to the only ones who were paying full price. Saks Inc. reported a 9.3% increase in September, better than the 6.5% gain expected by analysts. And Nordstrom Inc. posted a 10.7% surge last month, which exceeded the 5.2% analysts were predicting.


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