School shopping boosts retail sales in August

Retail sales increased in August as clothing and department stores saw consumers begin their back-to-school shopping.

The Commerce Department Tuesday reported a 0.4 percent increase in retail sales in August, marking the second straight monthly increase. Although some retail analysts have been expecting a slow and uneven recovery, decreases in monthly retail sales for May and June raised some worries that the economy might slip into another recession.

Tuesday's report revealed that consumers are not making impulse purchases because they don't have discretionary money, said Marshal Cohen, chief industry analyst for The NPD Group, a Port Washington-based market research firm. Consumers are not shopping every weekend but they are buying during the various shopping holidays when there are sales, he noted.

But the situation is far from disastrous, he added. This year the government's monthly retail sales figures - excluding automobile sales - are almost consistently among the second highest for the decade, below the highs before the economy took a downturn, he said.

"Everybody is saying it's [retail sales] terrible," Cohen said. "No, it's not terrible. It's just not hitting where everyone wants them to hit."

Sales at Denny's Children's Wear, a 13-store chain headquartered in Plainview, have been moving in a "positive direction" for the year overall, said Jeff Klein, one of the company's owners. The family-owned chain continues to maintain its strong customer service and has shifted to "buying smarter," while also stocking the products their customers want, Klein said.

"We had a nice back-to-school [season]," he said. ". . . Basically, the fourth quarter last year was starting to improve. The first six months was up for us and the trend has continued through July and August."

Other local merchants, however, have no illusions of returning to the boom period just before the recession hit.

"People are afraid to spend like they used to whether they have it or not," said Peter Gibralter, owner of Dorothy's, a children's apparel store in Huntington Station. "August was OK, and September is OK. Is it going back to where it was? No."

About 82 percent of chief financial officers at leading retail companies said they expect stagnant economic conditions to continue, especially with a weak job market, according to a survey by BDO USA Llp, a Chicago-based consulting firm.

"Nobody sees a major turnaround of any great significance," said Al Ferrara, national director of BDO USA's retail and consumer product practice. "It just may very well be that what we have experienced over the past year and a half in the retail environment is the new norm."