Apparel, Department Stores Stand Out in Retail Report

The nation’s biggest retailers on Thursday issued mixed sales reports for August, with apparel retailers and department stores faring better than mass merchandisers during the back-to-school season.

Industry analysts continued to detect signs that consumers are still hesitant about making big purchases.

“We saw good sales in the apparel department, but many of the other departments show a cautious consumer,” said Walter Loeb, an analyst with Morgan Stanley & Co.

“These are not boom times,” Loeb said.

Key Indicator

Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc., agreed that although consumers generally are in a strong financial position and are confident right now, “spending is drifting sideways.”

Consumer spending accounts for about two-thirds of U.S. economic activity, and retail sales are considered a key indicator of spending trends.

Consumers have cut back on purchases of what are called discretionary items--as opposed to necessities such as food--because of rising mortgage payments and other credit costs.

Sales trends take on added importance at this time of year because August marks the beginning of the retailers’ most critical season. Shopping generally accelerates in mid-August as families prepare for the new school year and then continues to build through the holiday season, when stores earn about half their annual profits.

Consumer caution has hurt big general store owners such as the nation’s largest retailer, Sears, Roebuck & Co. Sears said its August sales were up 2.3% overall, but sales at stores open at least a year--known as same-store or comparable-store sales--fell 1.1%.

Retailers and analysts consider same-store sales a more accurate reflection of a company’s performance than totals that include sales at recently opened stores.

Another mass merchandiser, K mart Corp., also had a disappointing August, with overall sales up 4.8% and same-store sales up 1.5%.

MAJOR RETAILERS’ SALES IN AUGUST

In millions % of dollars 1989 change Sears 2,504 +2.3 K mart 2,058 +4.8 Wal-Mart Stores 2,122 +26.0 J.C. Penney 1,201 +17.1 Dayton Hudson 1,040 +12.7 May Dept. Stores 687.3 +9.6 Woolworth* 458.0 +13.3 Montgomery Ward 360.4 +1.0 Carter Hawley Hale 194.0 +1.8

* Excludes foreign sales.