Retail sales index up 6.4%

Early Easter helps boost sales at discount stores, other chains in March

April 12, 2002|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Drugstores, discounters and furniture stores helped lead a rise in retail sales last month as consumers continued hunting for bargains while shying away from department stores and specialty and apparel stores.

Many retailers were helped by the Easter holiday - which came two weeks earlier this year - but unseasonably cool weather across most of the country tempered sales in March.

Nationwide, major retailers' sales climbed 6.4 percent over March 2001 at stores open at least a year, according to Bank of Tokyo-Mitsubishi Ltd.'s index of 81 national chain stores.

"The strength that we saw in January didn't disappear," said Michael P. Niemira, an economist at the bank. "It remained with us. ... It signaled a recovery in the broader economy."

But consumers have continued their thrifty ways by shopping more at discount stores. Monthly same-store sales - for stores open at least a year - were up 10.7 percent at Wal-Mart Stores Inc. and 6.8 percent at Target Corp.

Same-store sales fell 0.4 percent at department stores, according to the Bank of Tokyo's index. Sales declined 0.2 percent at Federated Department Stores Inc., which operates Macy's and Bloomingdales. At May Department Stores Co., operator of Lord & Taylor and Hecht's, same-store sales dropped 6.9 percent.

"The consumer is still looking for value," said Sally Wallick, a retail analyst with Legg Mason Inc. in Baltimore, referring to consumers' preference for discount outlets.

"The consumer is still responding to quality and low prices, and you see that in the numbers that were reported [yesterday]. ... Sales have been coming back from their lows during the recession."

Drug store chains fared particularly well last month, with Easter-related merchandise, convenience items and pharmaceuticals luring customers into stores. The nation's three largest drug store chains - Walgreen's, CVS and Rite Aid Corp. - all posted healthy gains in same-store sales.

`Very healthy'

"Overall, the [drug store] industry in general is very healthy," said Derek W. Leckow, a retail analyst with Barrington Research in Chicago. "If I had to think of a word that characterizes drug stores, it's convenience.

"Consumers seem to be getting more confident. The unemployment rate never got exceedingly high, and as long as people are employed they'll continue to spend money on things."

Analysts warned that monthly sales figures appeared rosier last month because of the "Easter effect." But while some stores were helped by the holiday, others were hurt because they lost a day of sales.

April sales will likely be subdued in comparison with the similar period last year because retailers won't get the Easter sales boost, analysts said.

Some apparel retailers did better than others last month, but overall, apparel chain stores had negative sales figures, according to the Bank of Tokyo's index.

Gap sales fall 12%

The Gap Inc.'s same-store sales were down 12 percent through March. Women's clothing retailer AnnTaylor Stores Corp. reported a same-store sales increase of 3.5 percent for the similar period.

Other retailers that fared well include furniture sellers and warehouse shopping clubs. Same-store sales at Pier 1 Imports Inc., the largest U.S. retailer of imported home furnishings, climbed 10 percent in the five-week period that ended April 6. The company also said its fiscal first-quarter profit will top forecasts.

Price-conscious consumers also continued to fill up on goods from wholesale clubs. BJ's Wholesale Club Inc., Wal-Mart's Sam's Club and Costco Wholesale Corp. all posted monthly same-store sales increases.

"It shows that consumers, while they are opening up their wallets, they're still price sensitive," said Steven C. Baumgarten, a retail analyst with Parker/Hunter Inc. in Pittsburgh. "They're still looking for value in their purchases."

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