LI consumers wary; retail sales remain flat

Consumers on Long Island and nationally continued to be guarded in their spending last month, keeping retail sales flat in comparison to July.

The Commerce Department released its monthly report showing that there was virtually no growth in overall retail sales between July and August. But last month's sales of $389.5 billion were 7.2 percent higher than the same period last year.

Long Island retail experts and merchants agreed that consumers were wary in August as they faced a volatile stock market, high unemployment, a government starkly divided over economic policies and the aftermath of a hurricane on the East Coast. And the bump once expected from back-to-school sales in August and September didn't materialize, because consumers are shopping in increments, holding on to their money as long as possible.

But while all of the economic uncertainties and political squabbles did affect their spending, consumers did spend more than the prior year's August, noted Marshal Cohen, chief industry analyst for The NPD Group, a Port Washington market research firm.

"So many things were thrown at them [consumers] you'd think they'd go into hibernation, and they haven't," Cohen said. "They are actually spending seven percent more than last year."

Retailers in certain categories saw their August sales explode from the massive preparation for Tropical Storm Irene. Had it not been for storm-related sales, Costello's Ace Hardware, a Long Island family-run chain, was on track for a below-average August, according to co-owner Michael Costello.

"Our August was a record month for the company based on five days' worth of sales leading up to the storm," Costello said. "I would have to say that the bad news that's out there every day as far as what is going on with Wall Street and jobs affects consumer confidence, and sometimes that's much more important than how much money they have to spend."

August was much quieter than it was last year for Ginny McClean, owner of Bellmore's Have You Heard?, which specializes in invitations, favors and gifts. Overall, customers continue to look for ways to cut costs, she said.

"People are waiting until the last minute, and I think they are trying to hold on to their money as long as possible and do things as inexpensively as possible," she said.

That means many consumers could stretch out their back-to-school spending into November, said Julie Marchesella, first vice president of the Nassau Council of Chambers of Commerce and owner of Queen of Hearts Inc. in Merrick.

"I think they want to see what the economy is going to do and take it little by little," she said.