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January sales rise, but not enough

WASHINGTON -January's retail sales totals were certainly better than December's. But in the opinion of the people who watch these figures for a living, that's not saying much.

This was certainly true about the general-merchandise-store sales figures for the first month of 2001. According to the monthly sales numbers compiled by the U.S. Department of Commerce, department stores and general-merchandise retailers pushed their January sales up 0.4 percent over the December total, to $26.5 billion.

Certainly, after the appalling results from holiday 2000, any increase was welcome. But it wasn't enough to persuade the economic pundits that these retail channels were on a sudden comeback.

What was also less impressive about that gain was the fact that the general-merchandise category underperformed U.S. retail as a whole, and other key channels in U.S. retail in particular. January's total retail sales, according to the Commerce Department, grew 0.7 percent above the December figure, to $273.3 billion.

In addition, other retail channels that had been hard hit by the poor holiday shopping season-apparel, furniture and home furnishings-had wonderful Januarys by comparison. The furniture channel posted a strong 1.5 percent pickup in sales over December, to $14.4 billion; while apparel and accessory stores boosted their sales to more than $12.2 billion, 0.9 percent better than December sales in this channel.

David Orr, chief economist for First Union Economics Group, said the January numbers "confirmed the prior chain-store results showing a nice bounce in activity after the disappointing holidays."

Orr added, however, that "since there was awful weather in January (as well as very deep discounting), the only reasonable approach is to average the two months [of December and January]." In doing so, Orr came up with an unspectacular average growth for the two months of 0.3 percent.

Focusing on the general-merchandise chains, Michael Niemira, vp, Bank of Tokyo-Mitsubishi Ltd., said, "The good news is that consumers responded favorably to those post-Christmas bargains on clearance merchandise.

"Typically, a dismal Christmas could help January sales as retailers have a deeper and broader selection of leftover merchandise for the consumer to choose. As such, the reported strength in January sales is not a signal of a new upturn in consumer demand-quite the contrary."

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