The nation’s largest general retailers have been hoping for an end to their 19-month-old slump, but September sales figures released Thursday indicated that business is not likely to start booming anytime soon.
“Sales were a little bit stronger in September than they were in August, but customers still aren’t beating down the doors to get into the stores,” said Joseph Ronning, a retail industry analyst with the investment firm Brown Bros. Harriman Inc.
In August, sales slumped badly because of unseasonably hot weather. Retailers looked toward September in hopes that the advent of fall would finally bring an end to the sluggish sales trend that began a year and a half ago.
“Sales for the early part of the month through mid-month recorded a nice uptick,” but stores were unable to sustain that improvement the rest of September, said Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc.
Apparel sales, which have been in a yearlong slump of their own, improved slightly, but analysts still described them as weak.
The analysts said the softness in retail sales is not necessarily a sign of weakness in consumer spending, which is closely watched as an economic indicator because it accounts for two-thirds of the gross national product.
“Consumers are spending at a very high rate--they’ve just been moving to other areas like durables,” said Monroe H. Greenstein, an analyst with the investment firm Bear, Stearns & Co.
Karen Sack, an analyst with Standard & Poor’s Corp., agreed and noted that consumers also have been spending more for services--such as utilities and medical care--leaving them less money for general merchandise and apparel.
As a result, she said, retailers can expect only modest sales increases for the rest of this year.
“It doesn’t look like the turnaround that people expected will be here,” she said, but she added, “I think it’s safe to say the worst is over for retailers.”
Several retailers recorded sales increases of 3% or less--meaning they continued to lose ground to inflation, which has run at an annual rate of 4.6% so far this year.
On a comparative stores basis, sales were up 5% in October and up 0.2% for the thirty-five weeks.
Apparel sales fell into a slump in August, 1987, when women turned away from shorter skirts and fashions that they felt were boring.
The results reported Thursday were from general merchandise and apparel retailers.
MAJOR RETAILERS’ SALES IN SEPTEMBER
In millions % of dollars 1988 change Sears 2,995 +6.6 K mart 2,427 +7.1 J.C. Penney 1,204 +1.3 May Dept. Stores 6,740 + 14.6 Dayton Hudson 1,000 +15.1 Wal-Mart Stores 1,510 +25.0 Woolworth* 446.0 +13.7 Montgomery Ward 432.3 + 3.5 Carter Hawley Hale 245.6 + 6.3
* Excludes foreign sales.