US retailers plan for a bumper holiday season as consumers start spending

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American consumers hit the shops in higher-than-expected numbers last month, raising optimism among retailers planning for the holiday season. Economists already knew the US government's $3bn (£1.8bn) vehicle scrappage scheme had boosted car sales last month, but retail sales were strong across the board.

"The recovery is here," said TJ Marta, a market strategist at Marta on the Markets in New Jersey. "This wasn't just autos, it wasn't just gasoline. This was the US consumer getting out of their foxhole."

Buyers for major department stores say they were planning for a bumper Thanksgiving and Christmas shopping season, and Toys "R" Us, the children's retailer, is opening temporary stores at 350 locations across the US. In an unusual move for a major retailer, these "pop-up" shops will open in vacant properties at 80 malls or high streets, and inside its sister chain, Babies "R" Us, only to disappear again in January.

Last year's holiday season was the worst for retailers in 40 years, and surveys have not so far predicted a strong rebound this year. But some chains have reported an upturn in spending in recent weeks, particularly over the Labour Day weekend.

Best Buy, the biggest consumer electronics chain in the US, missed its profit forecast for the second quarter of the year, but raised its outlook for the rest of 2009, saying sales trends were improving, customer traffic was stabilising and it was winning market share because of the bankruptcy of its main rival Circuit City earlier this year.

The August figure for retail sales caught Wall Street by surprise. Economists had expected a 2 per cent jump, on an annualised basis, but the commerce department said yesterday that sales in fact grew 2.7 per cent.

Car sales rose 10.6 per cent because of the scrappage scheme, but there were also gains of more than 1 per cent in electronics, general merchandise and the hobbies sector, which includes sporting goods, books and music.

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