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Feb. sales fall below plan

NEW YORK -Still limping along, but well beneath plan, retail sales edged up by 2.2 percent during the first week of March, but still lagged far behind a target of 3.2 percent growth as consumers, spooked by widespread layoffs, continued to hold on tight to their wallets.

This penny-pinching helped the nation's big discounters continue to outperform their higher-priced colleagues, the department stores and chains, where sales actually declined, slipping by 0.4 percent, according to the widely watched Redbook Average, which tracks retail sales on a weekly basis.

In one bright spot in an otherwise muted picture, home furnishings remained sturdy at the nation's discounters, said Redbook analyst John Pitt.

As consumers fanned out to the malls looking for lower prices, discounters pushed their sales up by 3.3 percent over year-ago levels but still missed their target of a 4.1 percent gain. And still performing poorly, broadline retailers-department stores and chains-dipped by 0.4 percent, missing their target of a 1.3 percent gain.

"Sales were below plan, or at the lower end of planned ranges, for most retailers in our model in the first week," said Pitt. "A few companies did report satisfactory performance; but our model as a whole was well below target after the first week, and retailers painted a fairly consistent and widespread picture of thin traffic and sluggish sales. One company cited snow storms in the northeast and the earthquake in Washington state as specific negative factors, but many retailers simply noted that traffic was sparse and customers reluctant to spend."

Basic consumers goods, said Pitt, "did better than seasonal, putting discount stores ahead of broadline stores after the first week relative to plan. The discounters were led by drugs, consumables and household supplies, although some reported strength in bigger-ticket discretionary goods like electronics. Home appliances and furnishings were also firm, possibly reflecting continuing activity in the housing markets. Regionally, business was strongest in the West, Midwest and Southern states."

Redbook Retail Sales Average First Week of March


WEEK ENDED 3/10 3/17 3/24 3/31 4/7 MONTH TARGET

Broadline*

-0.4

-0.4

1.3

Discounters

3.3

3.3

4.1

Redbook Average

2.2

2.2

3.2


*Broadline retailers, including department stores and chains.

Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.

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