Americans trooped into department stores last month, cash and plastic in hand, in numbers that cheered Wall Street analysts who said the year's upward trend of retail sales augurs well for a recovering economy.
Many of the largest chain store groups rang up double-digit percentage increases at the cash register, a sign of the consumer spending surge that some economists believe is needed to lead the nation out of recession.
"The sales gains in May continue to reflect the improving trend in evidence the last four or five months," said Jeffrey Feiner, retail industry analyst at Merrill, Lynch, Pierce, Fenner & Smith Inc. "Despite adverse weather conditions and continued sluggish economic activity, the reports were quite favorable and encouraging."
Feiner said lower inflation and lower interest rates should help bolster consumer confidence and spending to produce "a gradual improvement in retail sales through the year and culminate in a strong Christmas selling season."
Many of the nation's major retailers reported strong sales gains for durable goods, the "big ticket" items such as appliances and furniture.
Since those purchases are "postponable," the sales gain is evidence of rising consumer confidence and a "big increase in consumer wealth," said Jeffrey Edelman, a retail analyst with the securities firm Dean Witter Reynolds Inc. He suggested that the results are "further confirmation that the economic recovery is beginning to unfold."
A 38 percent gain in sales by the Levitz Furniture Corp. bears out the "very strong sales for the durable sector," he said.
The encouraging May sales reports sent prices of retail stocks climbing on Wall Street.
Chicago-based Sears Roebuck & Co., the nation's largest retailer, said sales for the four weeks ended May 28 climbed 6.3 percent from a year ago to $1.64 billion.
Sears Chairman Edward R. Telling said strong sales gains in major appliances for the eighth consecutive month and in home fashions reflected signs of an improved economy.
No. 2-ranked K mart Corp., headquartered in Troy, Mich., had a 10.3 percent sales gain to $1.47 billion. K mart Chairman Bernard M. Fauber said May sales "were in line with expectations, confirming our confidence in the continuing economic recovery. While the movement of seasonal goods was somewhat weaker than anticipated, everyday basic needs seem to be in great demand."
Sales for New York-based J. C. Penney, the third largest retailer, rose 3.6 percent to $744 million. Federated Department Stores Co., headquartered in Cincinnati and ranked fourth among retailers, said sales surged 14.7 percent to $511.5 million. No. 5-ranked F.W. Woolworth Co., based in New York, had a 4.2 percent increase to $407.5 million.
Sales at Dayton Hudson Corp. of Minneapolis, ranked sixth, surged 23.6 percent to $484.3 million. No. 7-ranked Montgomery Ward, the Chicago-based unit of Mobil Corp., had a 3.6 percent gain to $450.9 million.
David C. Farrell, president of St. Louis-based May Department Stores Co., said his company's 12.7 percent rise in sales to $308.4 million was "encouraging" but said sales "could have been even stronger, particularly in apparel, had they not been affected by unseasonably cool and wet weather. Consumers continue to be resilient and active in their buying."
Other retailers reporting May results: R. H. Macy & Co. had a 17.8 percent sales gain to $266.7 million; Carter Hawley Hale Stores, up 18 percent to $245.7 million; Allied Stores--parent of Garfinckel, Brooks Brothers, Miller & Rhoads Inc.--up 16 percent to $278.5 million; Wal Mart Stores, up 28 percent to $364 million; Melville Corp., up 17.6 percent to $280.4 million; Zayre Corp. up 12.7 percent to $187.6 million.