NEW YORK — Tax-rebate checks gave consumers a little extra money in their pockets during May, but most were still spending conservatively, buying necessities such as food and gas and shying away from splurging on clothing or furniture.
The result was some better-than-expected sales for the nation’s retailers, with lower-priced merchants like discounters and wholesale clubs showing the strongest gains.
Costco Wholesale and Wal-Mart were among the strongest performers, but fewer rebate dollars made their way to the mall, and retailers such as Gap and American Eagle Outfitters missed expectations.
“It was a great month for discount retailers, but the rest of retail is struggling to capture a share of the consumer’s wallet,” said Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle.
Overall, results were better than the gloomy May analysts predicted as consumers still shopped despite rising energy costs, declining home values and tightening credit. Some analysts saw some glimmers of a possible pickup in business later this year. And tax-rebate checks helped offset rising gasoline prices, said Ken Perkins, president of RetailMetrics, a research company in Swampscott, Mass.
“It certainly looks as though gas tanks didn’t siphon off all of the rebate stimulus,” he said. “Consumers were able to spend in May.”
Michael Niemira, chief economist at the International Council of Shopping Centers, said May results, coupled with a hoped-for decrease in gas prices in the coming months, could be the start of a turnaround in the sector.
