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Price War Dampens Comps

New York —For the second month running, the top five gainers in comparative-store sales for October were: the three warehouse clubs — Costco, Sam's and BJ's — off-price titan TJX, and upscale discounter Target.

It has been that kind of year.

For the 39 weeks year-to-date, only two of the 17 publicly-held chains tracked monthly by HTT had positive comps above 2%: Target, with a 4.3% comp gain, and BJ's at 3.1% .

Costco's year-to-date 7.0% rise measures just the first nine weeks of its fiscal year.

And it may be getting tougher still as price cuts — of course led by the crushing weight of the $345 billion dreadnought Wal-Mart — are rampant. Retailers reporting October comps were unanimous in making statements about the promotional climate, and also boasted where they could that inventories were being kept tightly in check for the fourth quarter.

Other than squawking about the overly warm weather that has hampered apparel sales, merchants were un-customarily quiet, perhaps clamming up as they prepared for this week's onset of third-quarter reporting and analyst Q&A sessions.

The results for home textiles were lackluster; few retailers mentioned the category at all, which may signal a bottoming out, as it differed from recent months when home was singled out as a negatively-performing department.

Reading between the lines of Target chairman and ceo Bob Ulrich's terse statement, things may have been stagnant in home there. Ulrich said, in part, “For the second straight month, we experienced soft sales in our higher margin categories,” which presumably include home textiles.

Wal-Mart, where comps were flat, stated, “Seasonal categories related to cold weather including those in apparel, home and hardlines were soft.”

There was a similarly laconic note from usually-talkative Kohl's, where chairman and ceo Larry Montgomery said, “Sales in weather-sensitive businesses such as outerwear, fleece and sweaters experienced significant declines on a comparable-store basis, contributing to our sales shortfall.”

Home was better at JCPenney, where “the best performing merchandise categories were family shoes and selected home categories,” but that was not enough to pull overall comps above negative 1.8% for the month.

Bon-Ton cited “home and furniture, better missy, petite and large size sportswear and cosmetics” as top performers.

In a mildly brighter month-to-month picture, the Johnson Redbook Same-Store Sales Index, tracking 49 chains, was up 1.6% for October, following a 1.1% rise in September and a 3.0% climb in August. However, the evidence was strong that prices are key this season: department stores as a group were down 1.5% while discounters managed a collective 2.4% gain, according to Redbook.

Winners and Losers
Same-store sales % change

Winners
Costco 9.0
BJ's 4.8
Sam's Club 4.2
Target 4.1
TJX Cos. 3.0
Duckwall-ALCO 2.2
Fred's 0.6
Losers
Dillard's -7.0
Kohl's -3.8
Stein Mart -3.8
Gottschalks -3.0
JCPenney Dept. -1.8
Macy's -1.5
Bon-Ton -1.4
Ross Stores -1.0


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