Shoppers are still frugal, but retail sales are not as bad as expected

"Better than expected" is the new catchphrase for retailers, most of whom posted August sales that were weak but not as bad as many had forecast.

Sales reported Thursday showed that shoppers continue to focus on must-have items such as food and toiletries, while luxury sales are dragging. Shoppers are still bargain hunting, even amid back-to-school sales and state tax holidays designed to send consumers back into the malls.