Retailers Report September Sales Slide
Sales at the nation’s biggest retailers took a slide last month, hurt by unseasonably warm weather and the funeral of Princess Diana, which kept many consumers out of the stores and glued to their televisions.
Retailers who reported their monthly sales figures Thursday said higher-than-normal temperatures in September stifled demand for new fall merchandise. Hardest hit were apparel merchants, as consumers delayed purchases of wool sweaters and winter coats.
“Last year it was real cold, this year it was real warm,” said Jeffrey Feiner, a retail analyst at Salomon Bros. Inc. “That’s the kind of switch that can really hurt sales.”
With warm weather still blanketing much of the nation, industry analysts warned that retailers could face lower third-quarter earnings and a disastrous Christmas season.
Retailers enjoyed a healthy summer selling season, and many anticipated sales would flourish through the holidays. Consumer confidence is high, and inflation and unemployment remain at low levels.
The Labor Department reported Thursday that new applications for unemployment insurance fell to 304,000, down from 309,000 the week before. It was the lowest level since the first week in August.
But the flourishing economy failed to entice consumers into stores in September. Instead, stocks of sweaters and overcoats swelled as shoppers held back on their seasonal purchases until cool weather set in.
In addition, Princess Diana’s death and funeral distracted shoppers, in much the same way as the Gulf War and Summer Olympics weighed down sales in past years. Diana’s funeral was held on a Saturday, usually the busiest day of the retail week.
Faced with a glut of fall merchandise, many retailers may now slash prices to clear inventory and make room for holiday goods.
“In the next few weeks or so, retailers will press the panic button and lots of ‘sale’ signs will go up,” said Kurt Barnard, president of Barnard’s Retail Trend Report, a retail consulting firm. “They need to get rid of merchandise quickly, before the Christmas season really begins.”
Most troubled in September were specialty stores, including Limited Inc. and Ann Taylor Stores Corp. Some department stores, including Sears, Roebuck & Co. and May Department Stores Co., also reported sales below estimates.
One bright spot for the month came from upscale retailers, namely Saks Fifth Avenue, which thrived thanks to strong demand for designer apparel, fine jewelry and men’s apparel.
The Salomon Bros. retail index, the investment firm’s barometer of sales performance, rose 2.3% last month after a 5.5% gain in August. It was up 3.7% in September 1996.
Sears said its same-store sales rose 1.5%, while total sales advanced 8.4%. Chairman Arthur Martinez said strong sales in appliances and electronics were offset by weak apparel sales.
Sales from stores open at least a year, known as same-store sales, are considered the most accurate measure of a retailer’s strength. They exclude sales from stores that have been closed and from new stores, which often have disproportionately strong sales.
