Despite consumer confidence readings that might suggest otherwise, consumer spending in this economy has been surprisingly healthy.Citigroup estimates that same-store sales will have grown 6.8% year-over-year in October as back-to-school momentum carries into the month.
In a new report to clients, Citi analyst Deborah Weinswig writes that she is optimistic that new trends like palazzo pants and coloured trousers, along with footwear, cosmetics and jewelry, will push sales going into holiday.
“Unlike last holiday season, during which fashion trends remained fairly consistent year-over-year, we are anticipating new colours, silhouettes, and key items this holiday season to drive excitement,” she says. “This bodes well for retail sales, as the new fashion trends and colours should entice shoppers to open their wallets to snatch up the new must-have items.”
Retailers will benefit from relatively easy comparisons to October 2010 and somewhat favourable weather in the Southeast. Below are Weinswig’s October same-store sales estimates:
- Costco: 9 to 11% growth, vs. 9.2% consensus, and 6.0% last year
- J.C. Penney: 1 to 3% growth, vs. 1.1% consensus, and (-1.9)% last year
- Kohl’s: 3 to 5% growth, vs. 4.6% consensus, and (-2.5)% last year
- Macy’s: 4 to 6% growth, vs. 4.1% consensus, and 2.5% last year
- Nordstrom: 6 to 8% growth, vs. 6.6% consensus, and 3.4% last year
- Saks Fifth Avenue: 6 to 8% growth, vs. 6.4% consensus, and 8.1% last year
- Target: 4 to 6% growth, vs. 4.1% consensus, and 1.7% last year
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