Retail Analysts Believe Worst Is Over for Spending

New York, NY, Oct. 12, 2009--Retail sales have shown their first year-over-year growth in more than a year, indicating the worst might be over for consumer spending, according to two analyst organizations.

U.S. chain store sales in September were up by 0.1% on a year-over-year same-store basis, the strongest reading since July 2008's 3.3% year-over-year growth, reports the International Council of Shopping Centers Inc.

"Small as that gain was, it marked a significant turning point for the industry, as well as the start of the retail recovery," says Michael P. Niemira, chief economist and director of research for the Shopping Center Council.

"To be sure, the retail recovery will be uneven and growth will be in spurts and fits, but it seems increasingly clear that it is recovery."

For October, ICSC Research expects comparable-store sales will be flat with last year`s October.

Consultants Retail Forward reported similar strength and optimism. Its calculations showed 0.8% year-over-year growth, excluding Wal-Mart Stores Inc., compared to a 0.5% decline in September a year ago. Including Wal-Mart, sales were up 1.3%.

"September`s numbers are a good sign that retail sales are on a path to recovery," says Frank Badillo, senior economist at Retail Forward.

"But it will be a slow, bumpy road as shoppers are cautious about easing the grip on their spending plans."

Retail Forward's ShopperScape survey in September showed consumers remaining cautious--47% of shoppers said they plan to spend less in the next month, up from 38% in August, which was the smallest share of shoppers planning to cut back since February 2008.

However, shoppers' plans for holiday spending have picked up since last month, the ShopperScape survey reports.