U.S retailer pulling out all stops- sales at five-month high - COST, F, JPM, GM, WMT & TGT
Northern, WI 03/14/2013 (avauncer) - The economy is bouncing back, at least for now. Job prospects are improving with more companies hiring. Down-sizing jobs which had become a norm is finally easing-off. All of this is helping the economy and the consumers overcome higher gasoline prices and taxes. Purchases have seen the biggest gain in five months and jumped by 1.1 percent. This figure exceeded all market analyst predictions. Companies are also boosting inventories and gearing up for the demand pickup. Ford Motor Company (NYSE:F) and Costco Wholesale Corporation (NASDAQ:COST) are benefiting from these changes as confidence is a natural outcome of improvement in the employment scenario.
Things looking better
This has also helped Americans weather the increase in payroll taxes. Improvement in the job market has been reflected in the 24,000 new employees that were taken on by retailers, last month. There was an unexpected drop of 7.7 percent in the unemployment rate and it stood at a four-year low. Economists at Deutsche Bank Securities Inc and JPMorgan Chase & Co (NYSE:JPM) raised their first quarter growth projections which was an indication that the economy is now gaining momentum and navigating the sequestrian cuts that started this month. No doubt the federal cuts are going to take their toll but things are looking up.
Car sales rising
The general trend that has emerged is that consumers are still spending more at auto dealers, building outlets and general merchandise stores. Online sales are also on the rise. The grim economy had created a pent-up demand for motor vehicles and aging fleets and cheaper borrowing rates are attracting customers to car dealer lots.
Light trucks and car sales picked up in February and pushed sales from the 14.4 million that they stood at a year ago to the current 15.3 million. Last month, Ford Motor Company (NYSE:F) deliveries rose by 9.3 percent from a year earlier which was the best February in the past six years. Sales at General Motors Company (NYSE:GM) saw a 7.2 percent increase.
Lowering discounts further
Costco Wholesale Corporation (NASDAQ:COST) which is the largest warehouse chain in the U.S reported a gain of 39 percent in the second quarter profit. It has been luring more customers by deescalating its already low, discounted prices. It is heartening to note that consumers are taking the increased taxes and federal cuts in their stride and spending has continued like nothing had changed. However, the demands haven’t been equally spaced across the market. A few department store and discount retailers such as Wal-Mart Stores, Inc (NYSE:WMT) have been struggling to boost their sales even as the delayed tax returns and tax increase are taking their toll.
Too much volatility
Wal-Mart is the world’s largest retailer and said that there will not bee too much of a change in the first quarter in same-store sales. The retailer who is second in line, Target Corporation (NYSE:TGT) said that sales hat taken a very slow start in February. The Chief Executive Officer of Target, Gregg Steinhafel said that the company has a very tempered view of near-term sales. Though there has been a ray of hope in the housing market, the market is still very volatile. He also said that the payroll tax increase and the rise in gas prices are all potential headwinds.
Shares of Costco Wholesale Corporation (NASDAQ:COST) went down by 0.32% to close at $103.42
Shares of Ford Motor Company (NYSE:F) went up by 0.07% to close at $13.40
Shares of JPMorgan Chase & Co (NYSE:JPM) went down by 0.24% to close at $50.16
Shares of General Motors Company (NYSE:GM) went down by 1.06% to close at $28.07
Shares of Wal-Mart Stores, Inc (NYSE:WMT) went up by 0.07% to close at $73.65
Shares of Target Corporation (NYSE:TGT) went up by 0.48% to close at $67.43