Cost-saving retailers are up in down times

By Mark Albright, Times Staff Writer
In print: Friday, May 9, 2008

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Retail sales woke up from a winterlong snooze in April, but shoppers stuck to buying the basics.

That's evident from the handful of chains that on Thursday posted modest but industry-leading comparable-store sales increases: Wal-Mart, 3.5 percent; Sam's Club, 6.6 percent; Costco, 8 percent; BJ's Warehouse, and the discounters Ross, 8 percent; and TJX Cos., which owns TJMaxx and Marshalls, 8 percent.

The teen discount apparel retailer of the moment, Aeropostale, saw same-store sales leap 25 percent.

Virtually all other chains posted minimal gains or continued declines in comparable-store sales — those open more than a year — a widely accepted measure of sales trends.

The UBS-International Council of Shopping Centers same-store sales index was up 3.6 percent after slumping to a 13-year low in March.

Experts who track retail sales cautioned that what looked like a rebound really was more of a head fake.

Thanks to a calendar quirk, April had one more shopping day this year. In cold-weather states, shopping weather was better this time, said Weather Trends International.

The first federal tax rebate checks designed to stimulate consumer spending were hitting bank accounts. ShopperTrak, which measures store traffic, found encouragement that last week was the third straight to post an increase.

"Some rebates might be propping up these results," said Frank Badillo, senior economist at TNS Retail Forward, a retail think tank. "Underneath it all, shoppers felt worse off in April" about their debt, home values and ability to swallow higher gas and food prices.

While consumer spending is about two-thirds of gross domestic product, many surveys show two-thirds of consumers plan to save the rebate cash or use it to pay down credit card debt.

"The gain was mostly small-ticket items," said Richard Hastings, who monitors retailer creditworthiness for Bernard Sands. "After the devastating declines in auto sales, we should expect apparel, footwear and seasonal goods to post occasional upside surprises like this, but that means nothing for big-ticket spending — the stuff that economies are made of."