Retailers across the United States are reporting higher sales in May, thanks to warm weather and increased promotions.
Overall, the seven retailers tracked by Thomson Reuters reported a 4.4 percent increase in May sales, excluding newly opened and closed stores. In addition, mall traffic improved during the Memorial Day weekend.
Many retailers posting quarterly results in recent weeks reported that their sales picked up in April and continued in May. For example, discount retailer Dollar General (NYSE:DG) reported an increase in quarterly sales, following pressure earlier this year from severe winter weather and the lackluster economy. And Costco (NASDAQ:COST) reported a 6 percent increase in May sales, excluding gasoline, surpassing analysts' estimates.
"There was a lot of pent-up demand from the bad weather but the consumer was still only shopping and buying when the promotions were aggressive," David Bassuk of AlixPartners, told The Wall Street Journal.
L Brands, formerly Limited Brands, reported a 3 percent increase in sales in May, beating consensus estimates. Growth was led by a 5 percent increase in sales for the company's Bath & Body Works brand. The retail company's Victoria's Secret brand recorded a 2 percent sales increase, boosted by the company's lingerie segment and young-adult oriented Pink line.
Bassuk expects strong promotional activity to continue through June, typically a challenging month for retailers as shoppers spend time outdoors or on vacation. "It's a tougher environment to get the consumer to shop, so the main driver of getting customers to do so is to create a deal or an incentive," he said. "Pricing in June will be a huge factor in who wins and loses in the month."
-See this The Wall Street Journal article
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