UPDATE 1-PREVIEW-US chain store sales seen up again in October
* October U.S. chain sales due Wednesday/Thursday
* Same-store sales rise of 4.5 pct seen-Thomson Reuters
* Consumers spending, but still looking for deals
By Phil Wahba
Nov 1 (Reuters) - October sales reports this week will show steady spending by U.S. consumers, according to Thomson Reuters' same-store sales index, as improving finances for many shoppers helped overcome a barrage of scary headlines about the economy.
October can be a slow month, falling into the lull between the back-to-school season and the start to year-end holiday shopping. But it does give retailers a read into the shoppers' mindset and intentions ahead of the Christmas blitz.
A tally issued by Thomson Reuters on Monday found that Wall Street analysts expect the 23 retailers in its index -- including Costco Wholesale Corp and Macy's Inc -- to report a 4.5 percent increase in October same-store sales, or at stores open at least a year, well above the 1.6 percent increase in October 2010.
Most of the chains will report monthly sales on Wednesday and Thursday of this week.
"The consumer is out there spending," said Craig Johnson, president of Customer Growth Partners. "Consumers are financially healthier now than they've been in years." His preliminary estimate is that same-store sales rose 4.4 percent.
Shoppers have paid down enough personal debt since the recession ended that those with jobs feel comfortable spending more and are doing just that, said Johnson, who last week forecast the best holiday season since 2004.
But they are not spending with the reckless abandon of a few years ago and insist on good deals if they are to spend.
"As has been the case for the past year, there will be a focus on value. Shoppers will be lured to specific promotions, especially for mid-tier retailers," said Paul Lejuez, a Nomura analyst.
Department stores should continue to show solid gains, particularly Macy's Inc and Kohl's Corp , which got boosts last month from their exclusive Karl Lagerfeld and J.Lo clothing lines, respectively, according to the Thomson Reuters index.
At the high end, Nordstrom Inc and Saks Inc are also expected to report strong October sales, helped by luxury's continued recovery, according to the index.
Costco is expected to log the biggest gain in the survey, with higher gas prices contributing to a 8.8 percent jump. The last in class is expected to be Gap Inc , hurt by a 7.1 percent drop at its struggling North American flagship chain and an even steeper overall drop abroad.
The weather may also have dented sales.
TJX Cos Inc , which operates the Marshalls and T.J. Maxx chains, said last week that warm weather in the Northeast early in the month hurt sales of cold clothing. TJX nonetheless stood by its forecast of a 2 percent to 3 percent same-store sales rise for October at those chains.
And while the record snowfall in the mid-Atlantic states and New England hit on the last reporting day of the month, Lejuez said it reduced odds of retailers beating Wall Street's estimates.
The monthly tally gives only a glimpse of shopping at U.S. chains. The combined U.S. sales of the 23 chains are barely larger than those of Wal-Mart Stores Inc . Others not in the survey are Home Depot Inc, Kroger Co and Best Buy Co . TJX, Costco and Gap's monthly numbers include international sales.
Still, it is clear U.S. consumer spending has perked up in recent months.
"Job retention is holding up better and shoppers are learning to budget in higher gas prices," said Global Hunter Securities strategist Richard Hastings, who is expecting big sales gains this holiday season.
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