Retail sales strong in April

Average rise was 4.2%

at electronics stores, it was 13.1%, bank says

Consumer spending

May 07, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Strong consumer spending in April boosted retail sales above expectations at the nation's biggest chain stores, despite an Easter holiday that fell in March this year.

Spring apparel and home goods led the way for average sales to rise above the 3 percent analysts had predicted.

But some major chains, notably Target and Sears, Roebuck and Co., reported lower sales.

Specialty stores such as AnnTaylor Stores Corp., Limited Inc. and Talbots fared especially well, which the chains said should lead to better-than-expected first-quarter earnings, to be released later this month.

Average increases fell short of April 1998, which included the Easter holiday, but still left analysts impressed.

"Sales are extremely strong, far stronger than we had any reason to expect," said Kurt Barnard, president of Barnard's Retail Trend Report, a forecasting firm based in New Jersey. "They clearly reflect a very confident American consumer."

"Many companies fell short of the figure they achieved a year ago in April, but a year ago they benefited from Easter in April," he said.

The retail sector is continuing to benefit from a strong economy with low unemployment and inflation and high consumer confidence, Barnard said.

An index compiled by Bank of Tokyo-Mitsubishi Ltd. showed average gains of 4.2 percent at stores open at least a year, with sales rising 2.4 percent at apparel chains stores, 1 percent at department stores, 4 percent at discount stores and 13.1 percent at electronics stores.

Big-ticket items such as computers and consumer electronics helped boost the overall average, said Michael P. Niemira, a Bank of Tokyo-Mitsubishi vice president.

Circuit City Stores Inc. and Tandy reported increases of 11 percent and 8 percent respectively.

Dayton Hudson, which runs the Target and Mervyn's department store divisions, reported a 1.3 percent drop in April sales, with a 1.1 percent decline at Target stores. Other department stores saw sales drop below last year's levels, including J. C. Penney Co. Inc., Dillard's Inc. and Sears.

Sales rose at Federated Department Stores Inc., May Department Stores Co. and Saks Inc.

Some chains managed to boost sales by offering heavier promotions, including Kmart, which reported a gain of 5.7 percent, Niemira said.

Heavier promotions, plus softer-than-expected sales toward the end of the month at the nation's largest retailer, Wal-Mart Stores Inc., could indicate a slowing in the robust retail sector, Niemira said. Wal-Mart reported a sales increase of 4.6 percent at its Wal-Mart and Sam's Club stores.

"You may begin to see and sense a slower pace of consumer spending," he said.

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