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An unexpected boost at stores

Mall shopping fuels growth

Consumers are “tiptoeing back though they haven’t dramatically changed their shopping patterns,’’ one economist noted. Consumers are “tiptoeing back though they haven’t dramatically changed their shopping patterns,’’ one economist noted. (Toby Talbot/Associated Press)
By Anne D’innocenzio
Associated Press / February 5, 2010

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NEW YORK - Stores received a pleasant surprise in January as shoppers bought a little more clothing at mall stores, delivering solid gains for many retailers and providing more hope that a spending recovery that started late last year is being sustained.

Still, the sales reports, released yesterday, showed two kinds of consumers: ordinary people who are buying a little more but still focused on bargains, and the affluent who are spending more freely luxury brands as they feel encouraged by their rebounding stock portfolios.

Fourth-quarter profits look brighter, too, as Macy’s and Bon-Ton Stores are raising their outlooks because they didn’t have to discount heavily and saw sales improve.

“Retailers are breathing another sigh of relief,’’ said Ken Perkins, president of RetailMetrics, a research firm. “There are more winners than losers.’’

But Perkins emphasized that many shoppers were still tight with their purse strings.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, agreed, noting that consumers are “tiptoeing back though they haven’t dramatically changed their shopping patterns.’’

The ICSC reported that January sales were up 3 percent compared with January 2009, following a 3.6 percent rise in December. The January figure is well above ICSC’s forecast for a 1 percent gain. In January 2009, sales dropped 4.6 percent.

The numbers are based on sales at stores opened at least a year.

The figures exclude Wal-Mart Stores Inc., the world’s largest retailer which stopped reporting its sales on a monthly basis last year.

Many mall clothing stores including Limited Brands, Gap Inc., and Macy’s announced solid sales increases. Even Abercrombie & Fitch, which had seen its teen customers defect to less expensive alternatives, saw a surprising sales increase, its first since April 2008.

Stores ordered so conservatively for the holidays that they ended the holidays with less than usual to mark down in January.

As a result, some stores pushed up deliveries of spring items from jumpsuits to sandals, providing little inspiration to buy.

Retail sales

How sales at stores open at least a year changed in January for selected major chains over the same month last year.

Store Pct. change

Nordstrom Inc. 14

TJX Cos. 12

BJ’s Wholesale Club Inc. 8.4

Costco Wholesale Corp. 8

Saks Inc. 7

Neiman Marcus Group 6.8

Kohl’s Corp. 6.5

Gap Inc. 5

Urban Outfitters Inc. 4

Macy’s Inc. 3.4

Target Corp. 0.5

Walgreen Co. -1.1

Rite Aid Corp. -2.1

JCPenney Co. -4.6