September sales seen up on back-to-school and promotions

LOS ANGELES (Reuters) - U.S. retailers are expected to post modest sales gains for September, on cautious back-to-school shopping and aggressive month-end promotions from department stores looking to clear inventory ahead of the all-important holiday shopping season.

Much of the back-to-school buying came late in the season as students waited to make major purchases until after they returned to class and saw this year's trends -- a delay that increased the likelihood of finding marked-down goods, analysts said.

Such behavior is a symptom of the slow improvement in consumer spending in the United States, where a sluggish economic recovery has done little to spur new job creation.

"We're seeing a consumer who is really holding off on purchasing," said David Bassuk, managing director in the Global Retail Practice at AlixPartners.

Analysts on average expect a 2.2 percent increase in sales at stores open at least a year, according to Thomson Reuters data. The estimate takes into account 28 retailers that report monthly sales. Many of the country's largest chain operators, including Wal-Mart Stores Inc and Best Buy Co Inc, do not report monthly sales.

Costco Wholesale Corp is expected to be the standout among discounters, which are expected to report a 3.3 percent gain in same-store sales. Department stores are seen posting a 3.1 percent gain, with apparel retailers up 1.3 percent.

"We're going to continue to see discounters dominating any growth that comes forward. The shopper has cast their vote clearly around the need to be frugal," said Janet Hoffman, global managing director of Accenture's retail practice.

September marked the end of the back-to-school season and industry experts had opposing views on what the results meant for the upcoming winter holidays.

"The fact that back-to-school turned out to be halfway decent could be encouraging for the holiday shopping season that's just right around the corner. There's a pretty decent correlation between the two," Retail Metrics President Ken Perkins said.

But Bassuk, of AlixPartners said retailers, who placed orders when there was more optimism about the recovery, are dependent on shoppers who are delaying purchases and selectively shopping for deals.

Zumiez Inc, which sells skateboard and snowboarding-inspired clothing, is expected to post the biggest gain among teen clothing retailers during the season, with an average forecast of 12.2 percent, according to Thomson Reuters.

Since the beginning of May, when most retailers started their second quarters, the Standard & Poor's retail index is down about 4.3 percent, a touch more than the 4.2 percent decline in the S&P 500.

On Friday, the Thomson Reuters/University of Michigan Surveys of Consumers showed consumer sentiment improved more than expected in September, but remained at its weakest level in more than a year due to economic worries among upper-income families.

High U.S. unemployment has muted consumer spending, but individuals with jobs have been showing signs of venturing out to higher-end retailers (as well as full-service restaurants).

To that end, analysts are looking for a strong rise in sales at Nordstrom Inc's upscale department stores.

"The high end is creeping back" from its steep declines, Accenture's Hoffman said.

Elsewhere, mainstream department stores have been doing a better job of offering value, localizing assortment and introducing new fashion collections. As a result, Macy's Inc shares are up 17.1 percent since the end of August.

Lingering hot weather in early September helped clear shelves of the remaining summer inventory and department stores such as Macy's stepped up promotions when business softened at month end.

Exclusive "Material Girl" and Liz Claiborne collections have lifted results at Macy's and J.C. Penney, respectively, and analysts said Kohl's has been gaining share.

(Reporting by Lisa Baertlein; editing by Andre Grenon)