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August retail shoppers come to merchants' aid

NEW YORK - Consumers undeterred by escalating credit problems and a weakening housing market went on a back-to-school buying spree in August, helping many retailers rebound from July's disappointing sales, according to sales reports issued yesterday.

A Wal-Mart customer takes her purchases after checking out at a store in Niles, Ill. Heavy back-to-school shopping last month helped retailers rebound from a slow July. Still, mortgage defaults and a volatile stock market could affect holiday shopping.
A Wal-Mart customer takes her purchases after checking out at a store in Niles, Ill. Heavy back-to-school shopping last month helped retailers rebound from a slow July. Still, mortgage defaults and a volatile stock market could affect holiday shopping.Read moreM. SPENCER GREEN / Associated Press
    by By Anne D'Innocenzio, Associated Press, Inquirer
    Published 

NEW YORK - Consumers undeterred by escalating credit problems and a weakening housing market went on a back-to-school buying spree in August, helping many retailers rebound from July's disappointing sales, according to sales reports issued yesterday.

Still, analysts expressed concern that economic concerns might curtail shopping in the critical months ahead.

As the nation's big retailers reported better-than-expected sales results, winners crossed all sections of the industry and included Wal-Mart Stores Inc., Target Corp., Pacific Sunwear of California Inc., and Saks Inc. Among the handful of disappointments was Kohl's Corp.

In the Philadelphia area, three retailers reported sales gains last month, and two said sales fell.

"It's surprising, but shoppers are shopping. The question is, when are they going to drop? We really are expecting people to take a step back," said Mike Schenk, senior economist at the Credit Union National Association, which represents 9,000 credit unions nationwide.

The results were helped by a number of special factors. For one, there has been a growing trend to start classes later, delaying back-to-school purchasing until August.

Last month's business also was boosted by a shift in a tax-free sales week to August in two critical states, Florida and Texas. Cooler weather in the Northeast and Mid-Atlantic regions also aided sales of fall fashions.

Wal-Mart posted a 2.8 percent increase in same-store sales from August 2006, helped by strong sales of back-to-school items. These sales are at stores open at least a year, a key industry gauge.

Wal-Mart said electronics, school supplies and children's apparel were among the top-selling categories. It also said sales of laptops and calculators did well. The discounter said increased price-cutting also helped.

Rival discounter Target said same-store sales rose 6.1 percent.

Macy's Inc. posted a 2.4 percent gain in same-store sales.

Kohl's reported a 0.6 percent decline in same-store sales, as demand in men's and women's clothing slowed.