Americans still bagging bargains and bulk buys

NEW YORK (CNNMoney.com) -- Despite much hope that Americans are finally thawing out of their year-long self-imposed shopping freeze, store sales last month were good in pockets -- but not great, as many analysts were hoping.

With this latest disappointment behind them, the concern now for merchants is when, or will, consumers get their shoppping bags out in earnest for the start of the 2009 holiday shopping period.

The holiday shopping frenzy unofficially kicks off in just a few weeks on Black Friday, or the day after Thanksgiving.

The fourth quarter, which includes the November-December gift-buying months, is typically the most critical annual sales period for sellers. Those two months can account for 50% or more of retailers' sales and profits for the year.

"For well over a year, consumers have been in shellshock. They are now starting to come out of the bunker, but they still are wearing their body armor and shopping smartly," said Craig Johnson, president of retail consulting group Customer Growth Partners.

While consumers are still very price-focused, he said better-than-expected sales results from some high-end sellers shows more people are becoming comfortable spending a little bit more money again.

"This trend bodes well for the holiday season," said Johnson.

As leading chain stores trotted out their October same-store sales Thursday, it was obvious that shoppers did remain very budget conscious, and are still favoring bargain and bulk sellers over clothing, department stores and other merchants.

Same-store sales, or sales at stores open at least a year, are considered to be a key measure of a retailer's performance.

While cooler October weather likely helped lift sales of winter clothing, many retailers posted better sales numbers because of significantly easier comparisons from a year ago, said sales tracker Thomson Reuters' retail analyst Jharonne Martis.

Thomson Reuters, which tracks monthly same-store sales for 30 chains such as Target, Gap and J.C. Penney, said overall October sales for the group rose 1.8% compared to a 4.1% decline last October. Analysts had expected a gain for the group.

Last month's shopping patterns favored Costco (COST, Fortune 500), the No. 1 warehouse club operator, which reported a 5% same-store sales gain, beating analysts' estimates for a 4.7% increase.

However, Costco said the company's sales also benefited from a weak dollar that boosted its overseas sales.

Discounter Target (TGT, Fortune 500) reported a 0.1% sales decline in October, better than a 4.8% drop a year ago. Wal-Mart (WMT, Fortune 500), the world's largest retailer, which has benefited from the recession as consumers flock to its low prices, no longer reports monthly sales numbers.

However, the retailer is expected to provide details about its monthly sales when Wal-Mart reports its quarterly results next week.

Mid-price department store chain J.C. Penney (JCP, Fortune 500) reported a 4.5% drop in its same-store sales, which was slightly better than its own forecast for a 5% to 8% decrease in the month.

Gap Inc (GPS, Fortune 500)., the No. 1 clothing seller, reported a better-than-expected 4% sales gain in the month.

The high-end space saw a little bit of relief as well. Department store chain Nordstrom posted a 6.5% sales gain while sales at Saks (SKS) rose 0.7% for the month.

Elsewhere, merchants took a beating. Comparable sales at teen clothing chain Abercrombie & Fitch tumbled 15% in October. Limited Brands (LTD, Fortune 500), parent of Victoria's Secret and Bath & Body Works chains logged a 4% decline in its sales versus analysts' expectations for a 2.7% decline.

And department store operator Macy's said its monthly sales slipped 0.8%.

Some industry watchers, however, aren't convinced yet of a full-bodied return to spending.

"Yes, there is clear momentum building in as we go into the holiday season," said Ken Perkins, president of sales tracking firm Retail Metrics. "Consumers are looking at better housing data and other economic reports, and are more comfortable making discretionary purchases when when unemployment is rising."

Still, Perkins said he's skeptical about the strength of this recent uptick in spending.

"Retailers are up against their easiest year-over-year comparisons in a decade," he said. "And the comparisons get even easier over the holiday months."

"So this improvement in the monthly sales could be more of an optical illusion rather than a real improvement in spending," he said.

The National Retail Federation, the industry's largest trade group expects 2009 holiday sales to decline 1%, improving from last year's 3.4% decline.

Johnson expects holiday sales to grow about 2.4% while Perkins' forecast is for a gain of between 1 to 2%.