Specialty apparel chains and discount stores saw their sales climb in August, while other retailers blamed sluggish back-to-school sales for disappointing monthly results.
Sales at the nation's chain retailers, reported yesterday, rose, on average, a healthy 6.6 percent based on an index of 75 retail chains tracked by Bank of Tokyo-Mitsubishi Ltd.
Among those benefiting most from strong consumer confidence and spending during the first month of back-to-school shopping were mass discounters such as Wal-Mart Stores Inc., the world's largest retailer.
Wal-Mart said yesterday that sales at stores open at least a year rose 8.7 percent. Dayton Hudson Corp.'s sales rose 4.9 percent, largely because of higher-than-expected sales at its Target discount division, the retailer said.
"This has been a retail boom that has been driven by middle-class and working-class people," said Rick Gallagher, vice president of the National Retail Federation and publisher of the trade journal Stores Magazine. "That explains why we see the retail channels like discount stores doing so well."
Though Wal-Mart continues to take market share from its competitors, August was a solid month for most in the industry, said Kurt Barnard, president of Barnard's Retail Trend Report of Upper Montclair, N.J.
"It showed consumers continued to spend with unabated zest, and they were undeterred by interest rate increases," Barnard said.
Higher interest rates didn't bother consumers, but they have bothered investors. The Standard & Poor's Retail Index of retail share prices fell 10.65 points, or 1.29 percent, to 814.74 yesterday. Analysts said fears of another interest rate increase overshadowed the sales results.
"The fear is that higher interest rates will slow down consumer spending in time for the Christmas season," Argus Research analyst Alan Mak said.
Specialty apparel retailers continued to post strong results. The Gap Inc. said sales rose 8 percent.
The picture was a bit more bleak for some retailers working to remake their images and carve out niches in the competitive industry, notably Sears, Roebuck and Co. and J. C. Penney Co. Inc.
"Although the overall pace of sales for August showed no dramatic industrywide change, the composition of those sales was somewhat less favorable, in part due to the continuing weak sales at Sears and J. C. Penney," Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi, said in a report yesterday.
