Storm helps retail sales pull a September surprise; Also bolstering the numbers was back-to-school buying; The economy


Sales at the nation's biggest retail chains rose above expectations in September as consumers, buoyed by a robust economy, bought school supplies and appliances and stocked up on everything from batteries to canned goods in preparation for East Coast storms.

Discount stores and home improvement chains benefited most from Hurricane Floyd, which hit in the middle of last month, retail analysts said. Department stores, however, lost sales -- and failed to catch up later in the month -- when flooding kept shoppers away.

But the storms only modestly dampened average sales, which posted a 6.7 percent gain, according to the Bank of Tokyo-Mitsubishi's tally of 82 chain stores.

Industrywide, store sales were expected to rise by 6 percent to 6.5 percent, according to the bank's projections.

"It was a steady picture overall," said Michael P. Niemira, vice president with Bank of Tokyo-Mitsubishi Ltd. in New York. "There clearly were some effects from the hurricane on the East Coast, but that seemed to get washed out across the country."

The bulk of back-to-school shopping still falls in September, he said, and "by and large, retailers did well in the back-to-school sales."

Sales rose an average of 3.71 percent at department stores, 6.82 percent at discount stores, 8.21 percent at specialty apparel stores and 9.02 percent at warehouse clubs, according to the Bloomberg Same-Store Sales Index.

"If it hadn't been for Floyd, the figures would have been still better," said Kurt Barnard, president of Barnard's Retail Trend Report of Upper Montclair, N.J. "Companies did either well or better than well. Consumers are out in full force doing their shopping, and there's no let up in sight. Any retailer that came through with less than 4 or 5 percent stood out." At Federated Department Stores Inc., for instance, comparable store sales rose 3.7 percent, below expectations because sales were hurt on the East Coast, said James M. Zimmerman, Federated's chairman and chief executive.

"I'm hearing from my companies; most met or beat expectations despite Floyd," said Kelly Armstrong, a retail analyst with First Union Capital Markets in Richmond, Va.

Even Sears, Roebuck and Co., which has performed poorly for much of the year, came through with a 4.1 percent increase, thanks to the chain's new marketing campaign. Other chains that posted weak results in September a year ago saw improvements, analysts said.

It was a bad month, however, for Kmart Corp., where sales rose just 2.5 percent. "September sales were below expectations, as the retailing environment became increasingly promotional through the back-to-school season," said Floyd Hall, president and chief executive officer.

Some trends that have emerged this year continued, with electronics, appliance and furniture sales remaining strong, Niemira said.

"Consumer confidence is still very high," Barnard said. "They feel good about jobs, or they're not worried because all they have to do is go across the street or around the corner and pick up another job with better pay."

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