NEW YORK - Consumers stepped up their shopping in May after tax rebate checks hit mailboxes, giving many of the nation's retailers stronger than expected sales for the month. Still, there were signs that many people are still focusing on necessities such as food and gas.
Discount and lower-priced stores such as Costco Wholesale Corp. and Wal-Mart Stores Inc. were again among the strongest performers.
Analysts had predicted a gloomy May, with consumers contending with a rising cost of living, declining home values and tightening credit. However, according to a preliminary report from Thomson Financial, of 17 retailers reporting early today, 10 beat expectations, one met expectations and three missed.
The tally is based on same-store sales, or sales in stores open at least a year; they are considered a key indicator of a retailer's strength.
"It certainly looks as though gas tanks didn't siphon off all of the rebate stimulus," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Consumers were able to spend in May."
Costco said food and gas sales helped results, along with the benefit of the weaker dollar, mainly in Canada.
Wal-Mart said it likely saw a benefit from rebate checks. While the world's largest retailer said sales in its food and health categories were strongest, it also had strong sales of entertainment items such as flat-screen TVs and reported the first same-store sales increase in the home category in two years.