Blog: May results get a tax break
Leonie Barrie | 5 June 2008
After a succession of dismal months on the results front, May’s performance by US retailers largely seems to have come in ahead of expectations. But the reasons are likely to be short-lived – the main boost having come from tax rebate cheques – and a focus on necessities like food and fuel is likely to take centre stage again in June.
It’s also worth remembering that the better-than-expected results this month are coming against weak estimates.
There are also signs that consumers continue to hunt for bargains, with discount retailers such as Wal-Mart (which saw US same-store sales rise 3.9% in May) among the best performers. Teen apparel retailers also seem to be holding up, largely because their core customers are less affected housing downturn, credit crunch and job uncertainty than their parents. But department stores and mall-based retailers continue to struggle.
Many of those retailers whose performance flagged this month also blamed the adverse effect of unseasonably cool weather compared to last May for comps that came in below par. And unfortunately, that’s something that can’t be overcome even in a strong economy.
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