February is usually a slow month for retailers. But shoppers avoided stores even more than normal last month, results yesterday from major chains show.
Retail experts blamed low inventory levels, rising interest rates and continued lack of interest in apparel. February's lackluster showing may also be a result of January, when vigorous post-holiday promotions at some chains increased revenue, analysts said.
"The trend in apparel being somewhat weak has continued," said Sally Wallick, who follows retailers for Legg Mason Inc., a Baltimore investment house. "January turned out to be a decent month, on a comparative basis. February was not as good."
J. C. Penney Co., Limited Inc., Gap Inc., Landover-based Hechinger Co. and May Department Stores Co., owner of Hecht's, were among companies posting disappointing sales for February.
Salomon Brothers' retail index, which gauges nationwide sales results, rose by 4 percent for the month, less than the index's 6.1 percent gain in January and less than a 6.4 percent increase in February 1994.
"The slow pace of February retail spending reflects the overall economic slowdown now being seen on a number of levels in the United States," including job-creation, housing starts and consumer confidence, said William Ford, economist for TeleCheck Services Inc.
On average, Baltimore-area stores may have performed better in February than their counterparts in the rest of the country, one indicator suggested.
Same-store sales in Baltimore-area outlets tracked by TeleCheck rose by a healthy 7.9 percent for the month. National sales rose by only 1.7 percent, said TeleCheck, which bases its results on the dollar amount of checks written at more than 18,000 stores across the country.
The local data suggest that Maryland's retail economic cycle continues to run several months behind that of the nation. Nationwide, business has been cooling off. Here, sales are still relatively healthy.
As measured by tax collections, Maryland retail sales rose by a robust 10 percent in November and 7.48 percent in December. January tax results aren't available yet.
Among national operators, discounters Sears, Roebuck & Co. and Wal-Mart Stores Inc. reported strong results. At Wal-Mart, the country's biggest retailer, sales in stores open at least a year increased by 6.7 percent compared with February 1994.
Retailers consider such "same-store" results a key measure of financial health because they discount growth generated by new locations.
Sears' same-store sales increased 5.4 percent. Struggling discounter Kmart Corp said same-store revenue grew by 3.4 percent. At Kmart, "apparel is still sluggish," said Thomas Tashjian, retail analyst for First Manhattan Co. in New York.