Sales at the nation's top chain stores inched up in January, as retailers used the post-holiday month to clear winter merchandise from their shelves and consumers continued to rein in spending.
Sales at stores open at least a year were up an average 1.8 percent, compared with January of last year, according to a tally of 80 chains by Bank of Tokyo Mitsubishi. National chains reported sales yesterday for January, considered largely a clearance month.
Retailers turned in mixed results, with some sharp sales drops - including a 10.3 percent decline for AnnTaylor Stores Corp. - and a few bright spots, such as sales increases of 16 percent at Gap Inc. and 20.4 percent at Pacific Sunwear of California Inc.
But for the most part, "January was mostly and across the board a flat-ish month," said Kurt Barnard, president of Barnard's Retail Trend Report. "Retailers went into January with mostly picked-over inventory. There wasn't that much to sell. It was a month to complete the clearance of merchandise that was left over from the holidays."
Even industry leader Wal-Mart Stores Inc., the nation's biggest retailer, failed to meet analysts' expectations, reporting a 2.6 percent sales increase.
"Consumers are extremely cautious, not because of the possibility of war, but rather because they are deeply concerned about jobs and the availability of jobs," Barnard said.
Many retailers had expected sluggish sales going into the holiday season and were able to control inventory, experts said. That meant fewer goods to mark down in January, and fewer markdowns cutting into profits.
Target Corp., which operates big-box discount stores under the Target name as well as department stores, said sales fell in January by 0.4 percent, below plan for the retailer. Nonetheless, the company said that its financial performance for last year remains on track because of strength in its gross margin rate.
Apparel sales continued to suffer across the board, hurting many of the specialty apparel chains and taking a toll on sales at department stores.
"Department stores are the mecca for fashion apparel, and fashion apparel isn't moving," Barnard said.
Sales dropped 8 percent at Sears, Roebuck and Co., 4.4 percent at The May Department Stores Co. and 1.2 percent at Federated Department Stores Inc. Sales also fell at Saks Inc., by 2.1 percent, and J.C. Penney Co. Inc., by 3.8 percent - below plan for Penney but still enough that the company expects to meet analysts' earnings estimates for the fourth quarter.
Retail sales began slowing down last summer.
"January was no different," said Michael P. Niemira, a vice president with Bank of Tokyo Mitsubishi. "What we've been seeing since that time is a slower pace of ... economic activity.
"In large part, the retail sector is moving in lockstep with the broader economy," he said.
It will take a pickup in the employment rate, he said, to spur consumer spending.
In the meantime, as a potential war in Iraq looms, "consumers may be less inclined to spend and more inclined to spend just on staples."
One analyst, however, was heartened to see sales increases in January at some specialty apparel chains, including Gap, Abercrombie & Fitch, which reported a 3 percent sales increase for the year, and Chicos FAS Inc., which reported an 8.1 percent increase. The improvements could mean shoppers are shifting from big discounters to branded apparel stores, he said.
"People are ready to start filling up their closets again," said Michael M. Via, director of research for Anderson & Strudwick.