August Sales Bring Hope for Strong Holiday Season

With analysts increasingly looking to August retail sales as a benchmark, reports of better-than-expected growth for the month bode well for the industry’s critical fourth quarter.

“The back-to-school shopping season is a great barometer of what we can expect for the holidays,” said Bill Dreher, a retail analyst with Deutsche Bank in New York. “Consumers are feeling more flush because of fiscal and monetary policies, and we expect current momentum to continue through the end of the year with a robust holiday season.”

Amid such positive signs, Dreher said retailers may not need to resort to the heavy discounting that has characterized recent years.

August has become the third-most- important sales month, behind November and December. Last year, August was a disappointment for retailers, foreshadowing a dismal holiday shopping season: The industry posted the smallest gains in more than 30 years.

Current numbers in part benefit by comparison to last year’s lackluster August sales. Wal-Mart posted a stronger-than-expected 6.9 percent jump in August same-store sales, compared with 3.8 percent a year ago. After nearly two years of monthly declines, Sears Roebuck and Co.’s same-store sales rose 3.9 percent last month, versus an 11 percent drop in August 2002.