Retailers Report Modest September Gains
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NEW YORK – Consumers spent frugally for a fourth straight month in September, giving major retailers modest gains during the critical back-to-school season and raising questions about upcoming holiday shopping.
The sluggish results announced yesterday came from across the industry. Among stores reporting tepid results were Wal-Mart, Gap, Federated Department Stores, and J.C. Penney.
“There’s definitely some anxiety out there on the part of consumers,” said Ken Perkins, a research analyst at RetailMetrics LLC, a research firm in Cambridge, Mass.
Consumers, particularly low- and middle-income Americans, have been forced to cut spending on non-necessities as gasoline prices and grocery bills rise. Americans are also nervous about jobs – last week, the Conference Board reported that job worries helped push consumer confidence down in September for the second consecutive month.
Retailers also attributed the lackluster sales to the hurricanes that ravaged Florida and the Southeast in late August and the first half of September, forcing many stores to close. Some merchants reported that unseasonably warm weather in the Midwest and other parts of the country curbed sales of fall merchandise.
The International Council of Shopping Centers-UBS sales preliminary sales tally of 71 retailers was up 2.4%, better than the 1.3% gain in August, but well off the average 6% increase of January through May. The tally is based on what the industry calls same-store sales, or sales at stores opened at least a year. They are considered the best indicator of a retailer’s performance.
With sales in a four-month slump, retailers were growing concerned about the holiday season, when many of them hope to bring in as much as half their annual sales. Even a minor downward adjustment in spending by each household can add up to billions in lost business.
Wal-Mart reported a modest 2.4% gain in same-store sales, in line with the forecast of Wall Street analysts surveyed by Thomson First Call. Total sales increased 10.8%.
Target had a 5.6% gain in samestore sales, better than the 4.1% Wall Street estimate. Total sales were up 12.5%.
Among department stores, Federated had a 0.1% gain in same-store sales, better than the 0.7% decline analysts estimated. Total sales were off 0.2%. The company said it lost about $30 million in sales to Hurricanes Frances and Jeanne.
Sears, Roebuck and Co. had a 3.2% decline in same-store sales in its domestic business. Wall Street had expected a 2.7% decrease. Total domestic sales fell 4.9%.
J.C. Penney recorded a 2% increase in same-store sales at its department stores, in line with estimates. Total sales rose 2.3%.
Many mall-based apparel retailers languished. Talbots posted a 1.3% decline in same-store sales, a weak performance although better than the 4.0% drop Wall Street expected. Total sales were up 3%.
Gap had a 3% decline in same-store sales, worse than the 1.4% decline that Wall Street anticipated. Total sales declined 1%.