- The Washington Times - Thursday, October 7, 2004

NEW YORK (AP) — Consumers spent frugally for a fourth-straight month in September, giving major retailers modest gains during the critical back-to-school season and raising questions about the strength of upcoming holiday shopping.

The sluggish results announced yesterday came from across the industry. Among stores reporting tepid results were Wal-Mart Stores Inc., Gap Inc., Federated Department Stores Inc., and J.C. Penney Co.

“There’s definitely some anxiety out there on the part of consumers,” said Ken Perkins, a research analyst at RetailMetrics LLC, a Boston research firm.

Consumers, particularly low- and middle-income Americans, have been forced to cut spending on clothing and other non-necessities as gasoline prices and grocery bills rise. Americans also are nervous about jobs — last week, the Conference Board reported that job worries helped push consumer confidence down in September for the second consecutive month.

Retailers attributed lackluster sales to the hurricanes that ravaged Florida and the Southeast in late August and the first half of September, forcing many stores to close. Some merchants reported that unseasonably warm weather in the Midwest and other parts of the country curbed sales of fall merchandise.

The International Council of Shopping Centers-UBS preliminary sales tally of 71 retailers was up 2.4 percent, better than the 1.3 percent gain in August, but well off the average 6 percent increase of January through May. The tally is based on what the industry calls same-store sales, or sales at stores that have been open at least a year. They are considered the best indicator of a retailer’s performance.

With sales in a four-month slump, retailers were growing concerned about the holiday season, when many of them hope to bring in as much as half their annual sales. While consumers will, of course, be out shopping for the holidays, even a minor downward adjustment in spending by each household can add up to billions in lost business for retailers.

The disappointing retail results came as the government’s jobless-claims report offered hope that the job recovery may be gaining some momentum. The Labor Department said the number of new people signing up for unemployment insurance benefits dropped by a seasonally adjusted 37,000 to 335,000, the lowest level since the beginning of September. In the prior three weeks, claims had increased, partly because of the hurricanes.

Wall Street anxiously is awaiting September job figures expected today. Job growth slowed dramatically in July, but rebounded in August.

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