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Fewer shoppers spend in May

Retailers are still reeling from weak sales, as cool weather in parts of the country quiets store aisles.

By MARK ALBRIGHT, Times Staff Writer
© St. Petersburg Times
published June 7, 2002


Retail sales were sluggish in May, with many big chains reporting disappointing results Thursday for the second consecutive month.

National chains blamed unseasonably cool weather in the Northeast and Midwest, but it wasn't quite that simple. Overall consumer spending grew at a slower pace than it did during the winter.

"The weather was part of the story in May, but as in April, sales grew at a slower pace where the weather was not a factor," said Michael Niemira, an economist who tracks retail sales of 79 retail chains for Bank of Tokyo-Mitsubishi in New York. "There is still a lot of optimism out there about June, but retailers probably are going to be more cautious for the rest of the year."

Niemira estimated that sales in stores open more than a year rose a moderate 3.4 percent in May, a full percentage point better than he expected. But virtually all of the unexpected gain in the index he compiles came from Wal-Mart's 6.2 percent increase. The discount store giant said its May performance in stores open more than a year were propped up by groceries and household products, not seasonal items.

Most retail watchers judge chain sales performance on comparisons made with stores open more than a year. "Comparable" or "same store" sales are considered a better measure of a retailers' staying power with consumers than totals that include new stores.

May is usually the fifth-busiest month of the year for chains that sell general merchandise, but it's frequently a puzzler. June, the second-biggest sales month of the year, is usually more of a bellwether of consumer sentiment. It's also the month when retailers begin sealing their buying plans for the critical Christmas holidays.

Niemira is forecasting a 3.5 to 4.5 percent sales gain in June, a moderate performance not much better than May.

"We are hopeful our sales trends will improve now that more seasonable weather has finally arrived," said James M. Zimmerman, chairman and chief executive of Federated Department Stores Inc., which runs Burdines and six other department store chains.

Major department store chains reported declines in stores open more than a year. Federated reported a decline of 2.4 percent; Sears, Roebuck and Co., a decrease of 4.4 percent; Dillard's, a decline of 1 percent; May Department Stores, a decline of 7.6 percent; and J.C. Penney Co., a drop of 5.1 percent. That excludes Penney's Eckerd Drug chain, headquartered in Largo, which reported a gain of 6.7 percent.

Among specialty retailers, sales were down at Gap Inc. by 9 percent, at Ann Taylor Stores Corp. by 5.23 percent and at Talbots Inc. by 3 percent.

Same-store sales increased 2.6 percent at Target Corp., 5 percent at The Limited and 6 percent at Costco Wholesale Corp.

"Retailers that are demonstrating good value to the consumer are getting market share," said James Luke, who manages BB&T Asset Management's Large Company Growth Fund.

-- Information from Bloomberg News was used in this report. Mark Albright can be reached at

albright@sptimes.com or (727) 893-8252.

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