U.S. retailers reported August sales that showed some signs that the economic downturn was easing, but a late Labor Day holiday and muted consumer enthusiasm weighed on results in the key back-to-school season.
Consumers still focused on essentials and saving money as they face uncertain job prospects, ravaged retirement savings and lower home prices, a trend that could continue to weigh on retailers in the all-important winter holiday season.
Results from Costco Wholesale Corp
Food and sundries were the best sellers, while consumers continued to hold back on discretionary spending, the retailer said.
Limited Brands Inc
Walgreen kicked off the results, reporting a mere 1.9 percent same-store sales increase on Wednesday, missing analysts' estimates, as consumers continued to cut back on general merchandise.
Costco, Walgreen and Target Corp
The absence of Wal-Mart data means the economic view that monthly sales data provides is less complete.
But analysts still watch the reports, not only as a scorecard for individual companies, but also as a barometer of spending by consumers, which accounts for roughly 70 percent of U.S. economic activity.
The sales view is distorted by the shift of the U.S. Labor Day holiday -- which falls on the first Monday in September -- to September 7 in 2009 from September 1 in 2008. That shift means seven more pre-Labor Day selling days, including the entire holiday weekend, will be in the September sales reporting month this year. Last year, the Saturday of Labor Day weekend fell in August.
But some of the impact from the later Labor Day was muted by a shift of some states' sales tax holidays into August from July, analysts said.
(Reporting by Brad Dorfman; Editing by Lisa Von Ahn)