The outlook for the group remains strong although the retail market is expected to remain highly competitive as consumer spending continues to be tighter this year,

During fiscal 2006, we expect the retail market to remain extremely competitive and tighter consumer spending to continue for at least the first half.

We had expected a snap-back in consumer spending after a decline in May, and that's what these numbers showed. Consumers appeared to be optimistic in their spending, despite the stock market and the ongoing corporate frauds and malfeasance.

Although we expect consumer spending to slow sharply in the fourth quarter, to below 2 percent, as a result of lower auto sales, we expect that GDP will still edge back above 4 percent on an inventory rebound, higher business spending, and hurricane recovery spending.

The results were impressive to say the least. The outlook for consumer spending is a bit brighter than it was a week or so ago.

The recovery in consumer spending is in its infancy. Retail growth in real terms has been the weakest in 12 years and is just picking itself up from the bottom. The car market is still weak, with seasonally adjusted sales falling 2 per cent in March after a 2 per cent fall in February.