Retail sales inched up by the slimmest margin in nearly four years last month, suffering from a later Easter holiday this year, retailers said yesterday.
Many of the national chains reporting monthly results yesterday saw either lower sales or modest gains at stores open at least a year, compared with March a year ago. But the weak performance does not mean a slowdown in consumer spending, analysts said.
A tally of 78 chain stores showed an average increase of 1.8 percent, the Bank of Tokyo-Mitsubishi said yesterday. Merchants blamed the poor showing on a shift in the Easter holiday, which falls on April 23, three weeks later than last year. Retailers, who time spring promotions and summer kickoffs to the holiday, count on stepped-up buying of spring fashions, home decorations and candy.
The Bank of Tokyo index showed apparel specialty store sales down by 1.6 percent, department store sales off 1.5 percent and footwear sales tumbling 8.6 percent.
Industry leader Wal-Mart Stores Inc. posted an increase of 3.6 percent, far below the 11.3 percent gain it had in March 1999. Sales decreased 1.2 percent at Kmart Corp. Top clothing chain Gap. Inc. saw sales fall 11 percent, more than double analysts' forecasts. Sales rose a modest 0.8 percent at Men's Wearhouse and dipped 0.7 percent at AnnTaylor Stores Corp. -- compared with an increase of 21 percent in March 1999 for AnnTaylor.
Retailers who were unaffected by Easter demand performed well, said Michael P. Niemira, a vice president of the bank. Even those with lower sales, such as Kmart, reported strength in lawn and garden, home electronics, sporting goods and home decor. "These categories suggest that underlying demand remained solid last month, despite the weak appearance of the industry sales tally," Niemira said.
The holiday shift accounted for about three percentage points of lower sales growth in March, said Niemira, who noted that March sales were compared against the strongest month of 1999.
"March turned out to be by and large a much better month than anticipated," said Kurt Barnard, president of Barnard's Retail Trend Report. "That was especially true for specialty stores. Some did exceedingly well."
Those that bucked the slow-growth trend included the Limited Inc., with a 4 percent gain; the Dress Barn Inc., a women's apparel chain with a 16 percent jump in sales; Nordstrom Inc., with a 5.9 percent gain; Neiman Marcus Group Inc., with a 16.3 percent gain; and the Talbots Inc. women's apparel chain, where comparable sales rose 17.9 percent.
Department stores were among the hardest hit by the shift in the holiday. J. C. Penney Co. Inc. reported a 9.5 percent decrease at its department stores, saying categories that traditionally do well at Easter declined, though jewelry, window coverings and women's casual sportswear sold well. The May Department Stores Co. reported a 4.3 percent drop. Saks Inc. said sales fell 1.1 percent .
The month's results show a continuation of a trend in which consumers are shifting to specialty stores to buy either lower-priced or branded apparel and away from department stores, which depend on sales of upscale, designer fashion apparel, Barnard said. In some cases, department stores and general merchandisers saw increases, such as Sears, Roebuck and Co., where sales rose 3.8 because of strong sales in appliances and home furnishings, he said.
Analysts called the March results artificially low and an unrealistic picture of an industry that has seen strong sales growth. Retailers have benefited from low unemployment, high consumer confidence and rising wages.
"You're going to have to average March and April to get a meaningful trend," said William Ford, senior economic advisor for TeleCheck Services Inc. "We'll be very surprised if you don't see strong numbers for April."