January Retail Sales Avoid Slump, Up 5% : Economy: Spending surge at end of month helps stores post gains. But some analysts predict sluggish times ahead.
Major U.S. retailers today reported fair sales gains in January, with some having better luck than others at clearing out leftover holiday merchandise.
Sales at stores open at least a year rose around 5% industrywide from a year earlier, according to estimates by retail analysts.
Chains specializing in apparel had the best growth, while mass merchandisers, including the nation’s two largest retailers--Sears, Roebuck & Co. and K mart--tallied increases below the industry average.
January is typically a slow time in the retailing trade, and the month marks the end of the fiscal year for many merchants. Consumers usually have had their fill of spending at Christmas, and some people enter the new year bearing credit card debts that discourage them from shopping.
Widespread price cutting and other promotions this past holiday season--particularly by debt-laden department stores desperate to raise cash--may have left buyers more bloated than usual.
Edward Johnson, a retail analyst at Prescott Ball & Turben Inc., said the first three weeks of January were sluggish for retailers as consumers nursed a bad case of post-Christmas spending blues. But shoppers began returning to stores in the last week of the month.
The seasonally adjusted pace of sales quickened in the final week to about 8.5% from 4.8% in the first three weeks, he said.
Jeffrey Edelman of Drexel Burnham Lambert Inc. said retailers that had the leanest inventories due to brisk holiday business generally had the lowest January sales gains. The ones stuck with excess after Christmas pushed hard to move the merchandise to make room for spring lines and therefore posted higher sales results.
Looking ahead, Jeffrey Feiner, a Merrill Lynch & Co. analyst, said a recent erosion in consumer confidence, reflecting uncertainty about economic conditions and weakness in financial markets, portends tougher times for retailers.
“Weakness in both the housing and financial markets makes the outlook for consumer spending in retail stores in our opinion likely to be quite sluggish, at least over the near term,” Feiner said.
The sales reports today were from general merchandise chains, department stores, specialty apparel retailers and others. Here are some of the results:
Sears, the nation’s biggest retailer, said sales rose 2.2% in the four weeks ended Jan. 27 to $2.17 billion from $2.12 billion a year earlier.
No. 2 K mart reported a 13.1% increase, to $1.79 billion from $1.58 billion, while third-ranked Wal-Mart Stores said sales grew 24% to $1.84 billion from $1.48 billion.
Among retailers concentrating on apparel, J.C. Penney Co. Inc. said sales increased 8.5%. The specialty apparel retailer The Limited Inc. posted an 11% sales rise. The Gap Inc., another clothing specialist, said January sales surged 34%.
Dayton Hudson Corp., owner of department stores and the large Target discount chain, said January sales went up 12.2%. Woolworth Corp., owner of F.W. Woolworth Co. stores plus numerous specialty retailers including the Foot Locker chain, said domestic January sales rose 8.5%.
