Back to School Spending Boosts Retailers

Consumer Spending Ticks Up
Retailers Gain from Greater Back-to-School Purchases Even as Key Confidence Index Slips
By Conor Dougherty and Karen Talley
The Wall Street Journal Corporate News August 31, 2012

Consumer spending increased 0.4% in July from a month earlier, the fastest pace since February, the Commerce Department said on Thursday. Meantime, reports from retailers—including Target Corp., TGT +0.20% Macy's Inc. M -0.84% and Gap Inc.GPS -1.19% —showed same-store sales gains in August compared with the same period last year.

Gap posted a 9% increase in sales at stores open at least a year versus a year ago. All three of the company's North American brands—Gap, Banana Republic and Old Navy—reported increases, including a 12% rise at Old Navy.

Cincinnati-based Macy's said its same-store sales rose 5.1% over a year earlier. "The strength was broad based across merchandise categories, geographies and channels," said Chief Executive Terry Lundgren.

The improvement in same-store sales comes despite slumping consumer confidence. The Conference Board, a private research group, reported on Tuesday that consumer confidence fell to 60.6 in August—the lowest reading since November—from 65.4 in July.