. Last Updated: 07/27/2016

Britain, U.S. Cheered by Holiday Sales

COMBINED REPORTS


LONDON -- Spending is back in fashion in Britain and the United States, making sure the tills will ring merrily this Christmas with shoppers apparently set on a 1980s-style binge.


In Britain, sales are already booming because rising incomes and house prices, plus windfall cash from building society flotations, have made people feel richer than for some time. Analysts believe consumer confidence is at its highest since the late 1980s.


"The feel-good factor is out there," said one analyst.


Independent consultants Verdict predict a 7.7 percent increase in spending in December this year over last December, translating into sales of ?19.75 billion ($33 billion). Official figures show spending is gathering pace


"I don't think anyone doubts it's going to be a good Christmas, the question is how good," said John Richards, retail analyst at NatWest Markets.


In the United States, retailers were also hopeful after early figures showed plenty of buying over the Thanksgiving weekend, the official kickoff of the U.S. holiday shopping season.


After a dismal season a year ago, U.S. consumers crowded the nation's stores and malls with their wallets open. Several retailers said they had their best Thanksgiving weekend ever.


Revenues at malls rose by 11 percent from a year ago on the day after Thanksgiving, according to the International Council of Shopping Centers.


"Last year was the weakest Christmas in 11 years," said Clark Johnson, chairman of home-furnishings retailer Pier One Imports. But "this weekend was beyond our level of expectations."


Last year, a shaky economy and low consumer confidence left retailers with depressed holiday sales, which generally account for about half of stores' annual sales and profits.


That was good news for Sears, Roebuck and Co., which reported strong sales in tools, computers, men's and children's apparel, shoes and jewelry. "We had our best Thanksgiving weekend ever," said John Costello, Sears' senior executive vice president.


But on Wall Street, investors are depending on holiday shoppers to exercise some restraint in order to ensure a happy New Year without a hangover.


To achieve that workers will need to spend some of their generally higher pay -- but not too much -- on this year's presents.


Happily, New York's high-flying stock market could easily cruise through December and early 1997, which typically brings new investment money from holiday bonuses and retirement plan funding.


But times could turn rough if the early readings on holiday sales come in too robust or too soft.


Ned Riley, chief investment officer for the Bank of Boston, said observers are anxiously waiting to gauge the strength of this Christmas sales season. He noted that the market's fortunes in recent months have been largely based on the notion that the economy is slowing enough to keep inflation under control without an increase in interest rates by the Federal Reserve.


"The markets have rallied in anticipation of a rather lackluster Christmas selling season and the continuation of a slow growth environment," said Riley. "Any deviation from that almost perfect world will have an exaggerated impact." ()