Markdowns Boost Sales at Major U.S. Retailers in July

The nation’s major retailers reported Thursday that sales improved during July, but analysts said the companies resorted to larger-than-usual markdowns to stimulate buying.

In addition, some retailers were comparing their sales to a lackluster period a year ago, and that made the gains look better than they actually were, the analysts said.

Sears, Roebuck & Co., the nation’s largest retailer, said its sales for the four weeks ended Aug. 2 rose 5.5% over the same period last year.

No. 2 K mart said its sales jumped 15.9%.

Sales increased 3.4% at third-ranked J. C. Penney and 11.8% at fourth-largest Dayton Hudson. Fast-growing Wal-Mart Stores, ranked fifth, said sales spurted 41%.

Los Angeles-based Carter Hawley Hale Stores said its sales rose 5% over the like 1985 period.

Most of the sales gains were larger than the ones the retailers posted for June. However, neither month is a big one for the companies, which get most of their sales and profits in the fourth quarter of their fiscal year. Their year begins in February.

“The sales numbers look pretty strong in a number of cases, and in a number of cases the sales increases were better than that of June,” said Jeffrey Edelman, a retail analyst with the investment firm Dean Witter Reynolds.

“However, the tone of business was extremely promotional,” Edelman said. “As a result, the quality of the sales was not as good and is going to have a negative impact on profits.”

The Northeast and the Midwest were particularly promotional, Edelman said.

The price cuts were across the board, the analyst said. The retailers also aggressively advertised their merchandise, he said.

Walter Loeb, an analyst with Morgan Stanley & Co., said, “For some retailers, July was a weak month a year ago, so this also makes for an easier comparison.”

This year, sales fared poorly in the oil states and were sluggish in California, Loeb said.

Chicago-based Sears said its July sales came to $2.189 billion, compared to $2.075 billion a year earlier.

Home fashions, home appliances and home improvement items led the gains.