According to Thompson Financial, which tracks the sales of 43 retailers, same-store sales were up only 1.6%--below analysts' expectations of 2%. The number skews higher than September's index growth of 1.4%, but is well below the 3% growth shown in October 2006.
"Weather explains only a small part of the continued weakness," says Frank Badillo, senior economist with TNS Retail Forward--a Columbus, Ohio-based company that maintains its own 50-retailer index (which showed composite gains of 1.7%)--in a note. "Fuel prices, tighter credit and growing job worries are the bigger drags on retail spending, particularly for lower-income shoppers."
According to Thomson Financial, which tracks 43 of the country's retailers, 27 of them (or 64% of the index) missed their estimates. At Wal-Mart, the world's largest retailer, comparable same-store sales in the U.S. increased 0.4%, well below analysts' expectations of 1.1%. Total company sales, which include international markets, were up 8.4%, to $27.9 billion. According to the company, pharmaceutical and grocery sales were strong in the U.S., but seasonal categories tied to cold weather--such as apparel, home and hardlines--were soft.
The company projected comparable same-store sales for November to be between flat and 2% up.
At Wal-Mart competitor Target Corp., monthly same-store sales increased 4.1%, above analysts' expectations of 2.5%. Target total sales were up 9.7%, to $4.4 billion, for the month. End-of-month Halloween timing led the gains. However, company CEO Bob Ulrich said sales in the higher-margin category were soft.
Warehouse store Costco Wholesale Corp. said increased comparable sales were up 9% overall. Some of that gain reflected increased gas prices, which are up 25% over last year, according to the company.
Macy's reported a same-store sales decline of 1.5% for October, which was in line with previous guidance of sales to be down between 1% and 2%. Total sales were down 0.5%, to $1.85 billion. At the Gap, comparable store sales were down 8% over the same period last year.