Retail's Big Chill

February was a disappointing month for retailers, and it might not be the last one.

The Census Bureau on Thursday reported that retail sales declined 1.7% in February compared with January, marking the largest month-to-month decline since November 2001. And the slump would have been even worse if not for gasoline station sales, which grew 2.7% over January.

The numbers reflected the poor February sales figures reported by many retailers last week. But while retailers largely blamed their problems on February winter storms, retail analysts point to other, longer-lasting problems, such as increasing energy costs, rising unemployment and growing health-care costs.

"It's hard to take any optimism away from the numbers, from my perspective," said Jay McIntosh, leader of Ernst & Young's retail industry team.

Retailers have been struggling for months with declining or disappointing sales. Although department and grocery store chains have been among the hardest hit, even industry stars such as Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks) or Kohl's (KSS Quote - Cramer on KSS - Stock Picks) have posted sales figures below or at the low end of expectations.

February was a particularly difficult month for many of them. The snowstorms that blanketed much of the country forced retailers to close their stores, sometime for days. The weather particularly affected President's Day weekend, usually a time when retailers draw in consumers through big sales.

The sales figures by the government reflect a fairly widespread downturn in consumer spending. Among the losers: furniture stores, whose sales declined 1.6% from January and 1.5% from February 2002; clothing retailers, whose sales declined 3.6% from January and 1.5% from the year-ago period; and building material and garden supply stores, whose sales dropped a steep 7.5% from January and 1.9% from the year before.

Fueled Again

Leaving aside gasoline stations, whose sales benefited from the big jump in oil and gasoline prices in recent months, February's sales would have declined more than 2% from January. And without the nearly 24% increase in spending at gasoline stations compared with February 2002, retail growth on a year-over-year basis would have been less than 1% instead of more than 2.5%.

« Previous Page

1 2 3

Next Page »