The mixed performance of US retailers has signalled a shift in consumer spending patterns as sales still fail to sparkle during the sub-prime credit crunch.
Wal-Mart said lower than expected redemptions of gift cards during January have contributed to lacklustre sales during the month. Like-for-like sales remained flat, with a 0.5 per cent rise against a forecast 2 per cent increase.
The retailer said customers are holding on to their gift cards longer and using them more often for food and consumables rather than discretionary purchases. Wal-Mart announced a range of price cuts in late January to stimulate spending.
Rival discounter Target also reported strong sales of food and healthcare products, but posted a 1.1 per cent decline in comparable sales in January. Clothing sales were worst hit, continuing the trend first reported in September.
Meanwhile, mid-market department store group JC Penney said it did better than expected in January and posted a positive earnings forecast, but rival Kohl’s reported a like-for-like slump of 8.3 per cent as it cut prices to clear stock. Kohl’s reported earnings at the low end of expectations.
Like-for-like sales at Macy’s, the US’s largest department store group, fell 7.1 per cent in the month, leading to a cut in earnings forecast for the quarter. It announced that it was slashing 2,300 administrative jobs.
Saks, the luxury department store group, reported a 4 per cent increase in sales, but said that its wealthier customers had switched their focus to promotion-led purchases. High-end rival Nordstrom reported a 6.6 per cent fall in like-for-likes, while luxury retailer Neiman Marcus posted comparable sales up 3.3 per cent.