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Last Updated: Thursday, 4 May 2006, 17:10 GMT 18:10 UK
Wal-Mart leads bumper US sales
Wal-Mart shoppers
Will US shoppers slow their spending?
Warm weather and a late Easter has helped some of the United States' biggest retailers report bumper April takings.

Wal-Mart posted its largest monthly gain since October 2003, with a 6.8% rise in like-for-like sales, helped by demand for toys and music.

Its rival Target saw sales climb 10.4% while Abercrombie & Fitch was up 17%.

But analysts are warning that high fuel prices and rising interest rates could soon curb the enthusiasm of customers.

Jharonne Martis, an analyst at Thomson Financial said "robust results" from retailers such as Abercrombie showed that younger consumers still had a lot of discretionary spending.

Even Gap, which has been struggling to find the right product mix, did better than expected with sales slipping only 3% this April compared to April 2005, less grim than Wall Street had feared.

Slowdown inevitable?

Of 54 retailers issuing results on Thursday, 35 performed ahead of expectations, one was in line with targets and 18 fell short.

Analysis of the combined March and April period - to take into account this year's late Easter - saw trading up 4.3% overall, compared to a 3.1% increase in the same period year ago.

However petrol is now hovering around the $3 per gallon mark, with the price at the pump not expected to drop.

And the higher cost of filling the car is worrying retailers, especially those who rely on low income customers with less disposable cash.

There are also concerns that higher interest rates, which makes financing debt more expensive, will force shoppers to cut back.

Last month a survey of 58,000 US consumers found that 72% felt rising prices would hit their discretionary spending, compared to 42% a year ago.


SEE ALSO:
US sees rebound in retail sales
13 Apr 06 |  Business



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