Retail Sales Slump Reported for March

Sales at the nation’s major retailers softened in March as inflation fears and higher interest rates took their toll on discretionary spending by consumers, who chose to save their money, analysts said Thursday.

Inclement weather in parts of the country and the loss of a selling day due to store closures for the Easter holiday were cited as reasons for the mediocre results at the cash registers of several big general merchandisers.

Weaker sales could mean reduced corporate profits among merchants in the first quarter. On average, comparable or same-store sales rose 3% to 5% in March, unadjusted for inflation, analysts said. In February, same-store sales gained 6% to 8%.

“Obviously, there is a slowdown in consumer spending. Consumers have decided to save more, and a good guess for the reason is fear of inflation and higher interest rates,” said retail analyst Monroe Greenstein of Bear, Stearns & Co.

There were exceptions, however. The biggest U.S. retailer, Sears, Roebuck & Co., said sales were even better than it hoped they would be in the month in which the company introduced a new competitive pricing policy.

Allen Sinai, of Boston Co. Economic Advisers Inc., said the chain store sales were consistent with recent statistics pointing to a moderation in economic activity.

Most analysts, however, declined to attach too much significance to the March numbers, preferring to defer judgment on the retail outlook until April’s sales are tallied.

Edward Johnson, a retail specialist at Prescott Ball & Turben, said: “We think that sales will be back up once we get some warm spring weather.”

K mart, the second-largest U.S. retailer, said sales in the five weeks ended March 29 were $2.42 billion, up 2.5% from a year earlier.

Sales at K mart stores open for at least a year slid 0.8% from the year-ago level.

Wal-Mart Stores Inc. again exceeded the average of its peers with an increase in comparable store sales of 12%, while overall sales rose 26%, to $1.92 billion from $1.53 billion in the year-ago period.

MAJOR RETAILERS’ SALES IN MARCH

In millions % of dollars 1989 change Sears 2,973 +11.9 K mart 2,422 +2.5 Wal-Mart Stores 1,923 +26.0 J.C. Penney 1,233 +0.7 May Dept. Stores 1,050 +19.6 Dayton Hudson 1,100 +6.4 Woolworth* 482.0 +5.4 Montgomery Ward 387.4 +8.5 Carter Hawley Hale 231.6 +10.3

* Excludes foreign sales.