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Modest October for retailers

Shoppers took a breather last month, resulting in lackluster gains for retailers and raising the stakes on what is sure to be a competitive holiday season.

For Christmas shoppers, that could mean that heavy discounts will be coming early and often.

"The deals will be so attractive that shoppers may not want to wait," said John Long, retail strategist at Kurt Salmon Associates. "This is going to be a great [time] to be a consumer."

For October, the International Council of Shopping Centers index measuring revenue at stores open at least a year showed a 1.6 percent increase in October, the weakest performance since April's 0.8 percent increase. October's figure represented a slowdown from September, when it rose 2.6 percent. It's also below the average pace of 3.2 percent since the start of the retailers' fiscal year, which begins in February.

Revenue at stores open at least a year is considered a key indicator of a retailer's health because it excludes results from newly opened stores.

Behind October's results were clear winners and losers. Luxury stores including Neiman Marcus and Saks Inc. were the best performers as the affluent have recovered from the recession more quickly than everyone else amid a rebounding stock market. Macy's Inc., powered by its sweeping initiatives to tailor merchandise to local markets, had a decent performance, outshining rivals like J.C. Penney and Kohl's Corp., both of which suffered declines. It raised its earnings outlook.

Warehouse club operators such as Costco Wholesale Corp. fared well. Target Corp. posted a small gain slightly above Wall Street estimates. Target noted that essentials are selling better than nonessentials.

The index excludes Wal-Mart Stores Inc., which doesn't report monthly sales, but includes drugstores like Walgreen Co., which announced disappointing figures. - AP

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