- The Washington Times - Friday, April 10, 2009

NEW YORK | March same-store sales fell for the sixth straight month, as consumers continued to shop cautiously and stick mostly to necessities such as food, but there were some glimmers of stabilization in retailers' reports Thursday.

The later Easter hurt some results - notably Wal-Mart Stores Inc. - but several retailers predicted strong April sales and boosted first-quarter guidance. Discounters continued to outperform other sectors while the luxury market remained weak as shoppers continued looking for deals.

Retailers have been slashing costs and cutting inventory in an effort to improve results amid weak consumer spending.

Consumer spending is closely watched by economists and analysts because it accounts for 70 percent of all U.S. economic activity. Any sign of stability could be a hint of a bottom to the recession.

The economy's steep contraction in late 2008 was caused in large part by the 4.3 percent drop in consumer spending in the fourth quarter. That was the largest drop in more than 28 years.

While many retailers reported same-store sales declines, some boosted at least the low end of their quarterly guidance including TJX Cos., American Eagle Outfitters Inc., Hot Topic Inc., Aeropostale Inc., J.C. Penney Co. and others.

According to a preliminary tally by the International Council of Shopping Centers, same-store sales fell 2.1 percent in March. But ICSC Chief Economist Michael Niemira said that includes a three percentage point decline related to the later Easter and calendar shift.

Same-store sales, or sales in stores open at least one year, are considered a key measure of a retailer's health.

Discounters continued to report better results than most retailers, but there was some improvement in results for mall-based chains such as Gap Inc. and Limited Stores Inc. Though weak sales persisted, many retailers reported foot traffic improved.

Groceries, health products and accessories remain the most popular sellers, as consumers continue to shop cautiously amid massive job cuts and tight credit. The retail sales reports came as the Labor Department reported new jobless claims fell more than expected last week, to a seasonally adjusted 654,000, down from a revised 674,000 the previous week. Still, claims are stuck at a high level, while those continuing to receive unemployment insurance set a record for the 11th straight week.

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