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Retail sales are mixed in Sept.

Retail sales are mixed in Sept.
Discounters have a good month, but the nation's mall-based apparel stores suffer disappointing results.
By Anne D'Innocenzio / Associated Press
Friday, October 7, 2005

NEW YORK -- The outlook for the holiday shopping season grew murkier Thursday as September sales results from the nation's big retailers suggested that consumer anxiety about the economy is growing.

Discounters such as Wal-Mart Stores Inc. had a solid month as Americans struggling with higher gasoline prices and the economic fallout from Hurricane Katrina shopped for basics. But results were disappointing at mall-based apparel stores including Gap Inc., Ann Taylor Corp. and Talbots Inc.

The question now is how generous will shoppers be during the holidays.

"Uncertainty is always bad for retailers," said Michael P. Niemira, chief economist at The International Council of Shopping Centers. "And that uncertainty did not vanish with today's reports. We have the same worries about gasoline prices, home heating and the sustainability of consumer demand."

Niemira added that the only certainty is that the broad retailing trend hasn't changed -- teen retailers and high-end stores continue to do well while the rest of the industry struggles.

The International Council of Shopping Centers-UBS sales tally of 71 retailers rose a better-than-expected 4.0 percent in September, about the same pace merchants have seen all year, but Niemira warned that the sales figures don't tell the whole story. The tally is based on same-store sales, or sales at stores open at least a year.

"Overall, the numbers look OK on the surface, but they mask a lot of the story line, and the story line is probably not as positive as the numbers look," he said. "It is a very mixed reading."

Richard Hastings, senior retail analyst at Bernard Sands LLC, expects that this holiday season will be the most heavily discounted since 2002 as merchants try to woo uneasy shoppers.

"We are starting to see some cooling off of the overall consumer attitude."

Clearly, consumers had much to deal with in September.

Consumers who were already juggling their budgets due to the higher cost of gasoline had to contend with prices that soared past $3 a gallon. And the two hurricanes, particularly Katrina, have led to hundreds of thousands of job losses, making people across the country uneasy about the economy.

Last week, The Conference Board said consumer confidence suffered its biggest drop in 15 years in September. There have also been other government data pointing to a slowing economy.

Amid such worries, several retail forecasts predict only modest growth for the holiday season from last year.

The National Retail Federation projected holiday sales, which encompass November and December, to rise 5 percent, down from 6.7 percent in 2004.


LINK: http://www.detnews.com/2005/business/0510/07/C03-340450.htm