February Sales Good; 'Rolling Recessions' May Trouble Retailers

Article excerpt

Some of the nation's major retailers Thursday reported good February sales gains, indicating that a sluggish economy hasn't discouraged consumer spending.

But retailers could have a tough time this year coping with the effects of what have been dubbed ``rolling recessions,'' which are rippling through parts of the economy. The automobile industry and other areas in the manufacturing sector have been battered by such downturns.

Most of the general merchandise chains, discounters and department stores reporting Thursday posted unexpectedly buoyant sales growth, said Jeffrey Feiner of Merrill Lynch & Co. Inc.

``But we remain cautious given the generally weak economic conditions,'' he said.

The government's latest reading on the economy, released Wednesday, confirmed that weakness. The gross national product - the country's total output of goods and services - grew at a meager 0.9 percent annual rate in the fourth quarter, the worst quarterly performance since 1986.

Feiner also was reluctant to attach much significance to the results because February is typically a slow time for business in the retail trade.

In contrast to the chains that did well last month, Sears, Roebuck and Co., the country's biggest retailer, continued to struggle.

The giant Chicago-based general merchant had a ho-hum February. Sales were virtually flat, at $2.127 billion in the four weeks ended Feb. 24, vs.$2.126 billion a year earlier.

Sales at Sears stores open a year or longer edged up only 1.5 percent.

Retailers and industry analysts prefer to focus on sales comparisons for stores operating at least a year, called same-store or comparable-store results. Newly opened stores typically enjoy a period of unusually brisk business that isn't sustained over time.

One standout among the retailers reporting Thursday was Wal-Mart Stores Inc.

The big Bentonville, Ark.-based discount chain said its February sales surged 33 percent to $1.95 billion from $1.47 billion a year earlier. Sales at Wal-Marts open a year or longer posted a healthy 17 percent gain. …