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In September, retail sales inched higher by 1.1% from the previous month as consumers continue to do their part to turnaround a sluggish economy. Certain individual retailers, including Gap (NYSE: GPS), which experienced an 6% jump in comparable sales in September, had strong showings. Others, including Target (NYSE: TGT), fell short, but the discount retailer vowed 1.) that it was on track for its quarterly numbers and 2.) it will discontinue revealing its monthly results amid speculation that it places too much focus on the short term, according to The Wall Street Journal.
If those results are a harbinger of this year's holiday sales, retailers have something to look forward to. The increase represents the third-straight month of climbing retail sales. The results are tainted somewhat by the economic fiscal cliff that continues to threaten and also the weak employment picture that persists. Nonetheless, the sales -- which were driven largely by strength in technology -- bode well for holiday shopping sentiment.
The holiday shopping season is not what it once was given the obvious proliferation of online sales. Even brick-and-mortar stores have changed their strategies around the holidays, as product sales begin emerging sooner and Black Friday's meaning evolves -- a trend that was exacerbated last year when Target and Wal-Mart Stores (NYSE: WMT) began Black Friday early by opening their doors on Thanksgiving Thursday. This year, more retailers are expected to do the very same thing, said a Shark Media executive on CNBC.
Indeed, the definition of Black Friday has been muddled as retailers attempt to one-up each other yet again. Discounts that were once reserved for the day after Thanksgiving are instead being heralded in as soon as September and October, according to The Wall Street Journal, as stores are vying for limited consumer dollars.
Competition has become even more fierce this year as retailers including Target have promised "price Match," which ensures the retailers will match the online prices of rivals, such as Wal-Mart, Toys R Us, Best Buy and Amazon.com, for a period of time. Electronic retailer Best Buy has launched a similar initiative.
Last year during the Black Friday weekend, consumers spent about $52.4 billion over the Internet and at brick-and-mortar stores combined, according to Fox Business. Projections for 2012 holiday sales call for an increase in sales activity of 4.1%, based on NRF data cited in the Chicago Sun Times.
Discount retailers like Wal-Mart are not sweating any of it. The company's stock touched on new highs last week and any pullbacks, as a recent Barron's article points out, might be seen as a buying opportunity because the company is projected to have a solid showing in its fiscal 3Q results on November 15.
Longer term, the stock looks even better. Barron's cites a Citigroup report that suggests Wal-Mart will have stores in more than 500 neighborhood markets -- which incorporate mini-supermarkets into the stores -- in the next several years, which could mean $10 billion in newly generated revenues.
Wal-Mart might benefit this holiday from sales of toys made by Mattel (NASDAQ: MAT). The company, which just reported better than expected 3Q earnings, said that levels at Mattel and its retail partners are not excessive. The toy maker was lifted by strong quarterly sales of its American Girl Brand while sales of traditional items, including Matchbox cars, languished.
It's a curious time for Gap to announce the realignment of its online business. The company announced on Tuesday that its online chief, Tony Lenk, is stepping down. He will remain on until February 2013, which should mitigate any distraction that the realignment might have. Gap has decided to globalize and combine the online and retail businesses of its key brands, including Gap, Banana Republic and Old Navy, into one category. The firm has named Steve Sunnucks and Art Peck as global President and Chief of Global Initiatives for North America, respectively. Additional executive shufflings are occurring at Gap, as well.
There is a lot of pent-up anticipation of this year's holiday shopping season and Halloween hasn't even reached us yet. Despite all the negative factors surrounding the economy the consumer seems to find a way to be a bright spot, which makes retail stocks something to celebrate this holiday season.
GerelynT has no positions in the stocks mentioned above. The Motley Fool owns shares of Mattel. Motley Fool newsletter services recommend Gap, Mattel, and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.