RETAILERS COPE WITH TOUGH TIMES : Major Chains Report Mixed Sales in March : Economy: The strong gains of January and February fail to hold up.
Blaming a later-than-usual Easter holiday and cold, damp weather, the nation’s largest retailers Thursday reported mediocre sales in March, undermining the strides made in the first two months of the year and calling into question whether consumers are really leading the nation toward economic recovery.
The strong sales increases at the nation’s chain stores in January and February had raised expectations that shoppers were loosening their purse strings. However, March’s decidedly mixed results halted much of the budding euphoria.
In their wake, many analysts and retailers said they would have to wait until April sales results, which include the important Easter shopping period, before determining whether the first two months of the year were the beginning of an upturn--or an aberration.
“We should wait until next month and then average March and April to see where we are,” said Gary Schlossberg, chief economist at Wells Fargo Bank in San Francisco. “However, we may be seeing evidence that consumers are settling back to a more modest pace of consumption.”
Several big retailers, including Kmart Corp., Gap Inc., Woolworth Corp. and May Department Stores Co., reported that their March sales fell from those of a year ago. With few exceptions, notably J. C. Penney Co., retailers reported lower sales gains than in January and February.
Despite the weaker results, many analysts remained unconcerned and convinced that a recovery--however modest--is underway.
“The general tone of business is improving,” said Joseph Ronning, who follows retailers for the investment firm Brown Bros., Harriman & Co. “People I talk to say there are more shoppers. Mall traffic is picking up.”
One encouraging sign, analysts said, was the continued strong sales of “hard lines”--such as appliances, furniture and hardware--that were decimated by the recession. “Consumer electronics sales were strong for us all month,” said a Kmart spokesman.
But apparel sales slumped because Easter comes in mid-April this year, hurting retailers such as Kmart that depend on Easter holiday shoppers. Retailers said consumers are shopping later for spring clothes than in 1991, when the holiday arrived at the end of March.
Charlotte Locke of Glendora was exchanging a pair of pants Thursday in the Mervyn’s store in Glendale, one of her favorite stores because of its sales. But there was no browsing Thursday. “I came here for one purpose, (and I have) nothing else in mind.”
“Everyone has tightened their belts. We’re seeing necessary purchases only,” said Steven McClave, who runs a family-owned jewelry store of the same name in the Glendale Galleria.
In general, analysts said, retail sales so far this year have defied trend-watchers for a variety of reasons.
Results in January and February were boosted by warmer-than-usual weather throughout much of the nation. And comparisons to the previous year were artificially inflated because much of the nation was absorbed by the Persian Gulf War during the first two months of 1991.
Sales in March of this year were dampened by snow and rain throughout much of the nation, and comparisons to last year are distorted because Easter fell in March, and it was the first full month after the end of the Persian Gulf War.
Furthermore, several economists suggested that the strong sales in the first two months of the year, which were admittedly prodded by heavy discounting, stole business away from March.
Gap, which had outperformed most other big retailers during the recession, said sales at stores open at least a year fell 3%. Limited said such same-store sales tumbled 8%. Woolworth said its same-store sales dropped 9.9%. And May Department Stores said its same-store sales fell 4.7%.
Stores open at least a year--also known as same-store or comparable-store sales--are considered a more accurate assessment of a retailer’s performance than overall sales.
The nation’s largest retailer, Wal-Mart Stores Inc., said same-store sales rose 6%, while Kmart, the nation’s second-largest retailer, reported a 0.7% drop. Sears, Roebuck & Co., which also benefited from hard-line sales, said same-store sales rose 3.2%, and J. C. Penney reported a same-store increase of 9.5%.
The results reported Thursday include only department store sales, which represent less than 20% of all consumer spending. The retail sales report from the Department of Commerce, due Tuesday for March, includes supermarkets, restaurants and car dealers and is considered a far more accurate indication of spending patterns.
Times researcher C. A. Wedlan contributed to this story.
The Thrill Is Gone
Retail sales, which were up in January and February compared to a year earlier, dropped into the doldrums again in March. January and February of this year benefited from comparisons to a year when the nation’s shoppers were home watching the Persian Gulf War on television.
Percent change from 1991 Store January February March Wal-Mart +13.0% +20.0% +6.0% Kmart +6.2% +4.3% -0.7% Sears +7.7% +8.9% +3.2% Woolworth +6.0% +3.1% -9.9% Gap +14.0% +7.0% -3.0% J.C. Penney +7.3% +8.9% +9.5% Dayton Hudson +8.2% +6.0% +1.9% May Stores +8.7% +4.0% -4.7%
Note: Comparable-store sales results.
Source: The companies.
