Some of the biggest retailers in the US were raising their profit forecasts last night after reporting better-than-expected sales for the holiday season, in another tentative sign that the world's largest economy is getting stronger.
Macy's, whose Manhattan department store is a tourist mecca, upped its projected earnings for the fourth quarter of 2009 by more than 13 per cent, while clothier American Eagle and discount chain Target also promised better results.
The holiday season had appeared at times as a battle of wills between retail executives and shoppers, with the former offering only selective discounts while the latter expected a repeat of the late bargains available in 2008, when large amounts of goods went unsold.
In the end, consumers paid up, it is now clear. Chain store sales in December were 2.8 per cent higher than in the same month of 2008, according to the International Council of Shopping Centres, compared to the consensus forecast on Wall Street of about 2 per cent.
Warehouse chain Costco posted December sales up 9 per cent; American Eagle boasted 7 per cent; and Saks, the upscale department store, enjoyed a 10 per cent rise.
Not all were successful, however, as brands fell out of fashion, executives made misjudgments on pricing, or their sector succumbed to competition from internet retailers. Abercrombie & Fitch, the clothing chain, posted a 19 per cent decline, while bookstore Barnes & Noble was down 5 per cent.