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Retail sales still below freezing mark

Hammered by the after-effects of severe winter storms that paralyzed the nation's malls, and with consumers still pre-occupied by the possibility of war and lingering economic weakness, same-store retail sales lost ground for a second straight week during the fourth week of March, slipping by 0.2 percent after a 2.6 percent drop the prior week

"Sales were again below plan in the final week as the softness that became evident the previous week continued," said Redbook analyst Catlin Levis.

For the entire month, February sales were down by 2.0 percent from January, far worse than a projected decline of 0.3 percent. And measured against February 2002, sales were down by 0.6 percent, compared with a target of a 1.1 percent gain.

As usual, full-price department stores were hardest hit, with sales falling off by 5.4 percent following an even deeper double-digit drop of 10.4 percent the preceding week. Discounter sales improved by 3.0 percent, gaining strength after a 2.2 percent gain the week before.

"The bad weather during the previous week Presidents' Day sales hindered necessary sales momentum to clear remaining fall and winter inventories," said Levis. "The softness ensured a lack of momentum in the running month-to-date averages."

As the weather cleared during the closing days of February, Levis said, "sales improved but not enough to compensate for the bad weather of the previous week, and the month closed substantially behind its targets."

Best-sellers, said the Redbook report, were women's accessories, consumables and children's wear.

Looking for a silver lining, the good news is that February is historically one of the weakest months of the retail calendar, so the bottom line may not be as badly battered as the top line for the month.

Looking ahead, Levis noted, a quirk in the calendar could have a depressing affect on March sales, with a late Easter — three weeks later this year than last — pushing holiday sales into April rather than March. For comparative purposes, said Levis, both month's should probably be combined to level the playing field and get a truer sense of what's going on at retail.

Given the calendar shift, Levis said the preliminary target for the Redbook Average for March is a 0.1 percent increase, year-over-year, and a decline of 0.1 percent vs. February.

Redbook Retail Sales Average
Fourth week of February

Week ended 2/8 2/15 2/22 3/1 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department stores* -3.1 -4.1 -10.4 -5.4 -5.7 -2.8
Discounters 1.5 3.2 2.2 3.0 2.5 3.4
Redbook average -0.2 0.5 -2.6 -0.2 -0.6 1.1


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