The nation's major retailers yesterday reported soft sales in October, continuing a pattern of recent months and foreshadowing a weak Christmas shopping season.
With few exceptions, the retailers reported modest single-digit increases in sales on a comparable-store basis, which compares sales only from stores that have been open at least a year.
The lackluster performance reflected a weak economy, consumer anxiety over the possibility of war in the Middle East and sharply higher prices for gasoline and heating oil, analysts said.
"Pretty dismal," was the reaction of analyst Evelina Tainer at First National Bank of Chicago.
"This was a poor performance, but not unexpected in the light of economic and political uncertainties," agreed Kurt Barnard, publisher of Barnard's Retail Marketing Report in New York, an industry newsletter.
He said the October figures are "a clear signal of where the Christmas season is going."
"We are going to see a very frugal shopping population. They are going to buy fewer things and those are going to be less-expensive items," said Barnard. "There is no doubt in my mind that there will be a strong promotional climate, maybe as intense as last year."
Bentonville, Ark.-based Wal-Mart Stores Inc., the nation's biggest retailer, reported a 10 percent increase in same-store sales. K mart Corp. of Troy, Mich., the second-largest, inched ahead around 1 percent, as did F.W. Woolworth Co. of New York. But Sears Merchandise Group of Chicago, formerly the nation's biggest retailer and now No. 3, reported a 0.4 percent fall in same-store sales, and J.C. Penny Co. of Dallas saw store and catalogue receipts drop 6.3 percent.
Catherine Cooper, a retail analyst for Kemper Financial Services of Chicago, attributed Wal-Mart's strength to a gain in market share taken partly from K mart.
Wal-Mart's concentration of stores in the Southwest, where the economy has benefited from the recent oil price increases, also contributed to its stronger performance, analyst said.
Among October's other strong performers, Joppa, Md.-based Merry-Go-Round Enterprises Inc. reported a 19 percent jump in same store sales, while Gap Inc. of San Francisco reported an increase of 14 percent. But another hot chain catering to young buyers at the shopping mall, the Limited Inc. of Columbus, Ohio, saw same store sales drop 1 percent.
One hard-hit area seems to be electronics equipment. Earlier in the week, Richmond-based Circuit City Stores Inc., purveyor of stereo equipment, VCR and other home appliances and one of the country's fastest growing retail chains, reported that its same store sales had slipped 7 percent.
Analyst Janet Mangano of Jesup, Josephthal Inc. in New York said department stores in October had fared badly for the second consecutive month, and contrasted with retailers that offer discounted goods.
"I think there is a very clear differentiation based on what kind of retailer you are. Value-oriented retailers such as Wal-Mart and Dayton Hudson are offering very attractive prices and a fairly good selection," she said.
Dayton Hudson Corp., based in Minneapolis, reported a 2.4 percent increase in same-store sales.
Mangano said falling sales will push retailers toward promotions, thus increasing pressure on profits. She added, "I expect a very poor Christmas this year."