The mood of executives at retail firms normally moves in lockstep with that of their customers. But in America the news on May 25th that consumer confidence had reached its highest level in two years left them oddly subdued. Consumer spending per person, which fell for two years in a row for the first time since the Depression last year and the year before, has been rising again in recent months. But as retail executives place orders for the crucial end-of-year rush, they are anxiously debating how strong and lasting the consumer's revival will be.
In the first quarter both fancier retailers such as Gap, Macy's and Saks and workaday ones like Target, Wal-Mart and Home Depot all announced improved results. The rebound has been strongest in luxury stores: same-store sales at Neiman Marcus, for example, were 11 percent higher this April than last. But there was also reason for cheer at Home Depot, which relies on humbler consumers and the still-low housing market: revenues were up by 4.3 percent on the first quarter of 2009. Sales of home-improvement gear such as paint and gardening tools were especially strong.
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