Modest Retail Sales Reflect Cut in Spending

The country’s big retailers today reported only modest sales gains for July, continuing a trend that indicates weakness in consumer spending.

Results varied, with some store chains enjoying better business than others, but industrywide the month was a ho-hum one for retailers, said Jeffrey Feiner, an analyst at Merrill Lynch & Co.

Feiner said sales growth was in general modest and to a large degree reflected the generally sluggish overall economic environment. He said slowing growth in employment, weak personal income growth and continued relatively high interest rates have been lowering consumer confidence.

Although July is normally a slow time for shopping, analysts keep track of monthly sales figures from department stores, discounters and general merchants for clues about consumer behavior. Consumer spending supplies about two-thirds of the power for total economic activity.

Mediocre Sales

In recent months, mediocre sales at many stores across the country have signaled that consumers have reacted to rising mortgage payments and increases in other credit costs by curtailing shopping trips.

With sales tallies coming in below expectations, retailers will face extra pressure to capitalize on business during the rest of the year as the peak shopping season gets into full swing. Shopping usually picks up in August with back-to-school promotions and gains momentum leading up toward Christmas.

Sears said its sales edged up 0.4% in the four weeks ended July 29.

K mart said its July sales rose 6.2%, Wal-Mart Stores Inc. reported a 10% increase and Dayton Hudson’s sales were up 6.9%.

Carter Hawley Hale stores’ earnings were up 4.9%.