3.2% boost in August's retail sales beats forecast

NEW YORK - This year's back-to-school season isn't as big a bust for retailers as they feared - or as last year's - but it's not great.

Americans are spending only when the item and price are just right, according to August reports from major chains released Thursday that showed shoppers bought a little more than a year ago.

Analysts expect stores will need to keep discounting to get shoppers to spend into the holiday season while they grapple with job worries and tight credit.

"It's a glimmer of hope that the numbers are coming in ahead of low expectations," said Ken Perkins, president of research firm RetailMetrics. "But the back-to-school shopping season isn't anything to get excited about. It sets up a very promotional holiday season."

The International Council of Shopping Centers said its index of 31 major retailers rose 3.2 percent for August. That's a tad better than the 3 percent forecast, but it barely compensates for a 2.0 percent drop a year ago.

For most of stores releasing comparisons, they cover the four weeks that ended Aug. 28. Among the big winners were Costco Wholesale Corp., Victoria's Secret operator Limited Brands Inc., and Macy's Inc., whose results beat Wall Street forecasts.

Target Corp.'s results were helped by solid sales of food and back-to-school merchandise, but revenue overall at stores open at least a year fell slightly short of expectations.

Chains that cater to teenagers had mixed results. Luxury retailers, which have been holding up much better, were mixed as some affluent shoppers are spooked by the wild swings in the stock market.

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A back-to-school display in front of Juicy Couture in New York draws in teens looking for new fall fashions. MARK LENNIHAN / AP Enlarge

This year's back-to-school season isn't as big a bust for retailers as they feared - or as last year's - but it's not great.