By Nathan Weber
NEW YORK-- The downward spiral of the housing market, the related increasing cost of variable rate mortgages and tightening credit availability, and the rising cost of gasoline all conspired to make consumers more cautious in October. That resulted in limiting the growth of the month's sales in stores open for at least a year.
Although October's average sales increase among retailers tracked by HFN, at 0.7 percent, was better than the decline of 1.1 percent in September, it was notably lower than the 1.6 percent growth in October 2006, and hardly robust by historic standards.
The nation's leading department stores, as a group, experienced negative sales, down an average of 3.4 percent from the same month a year ago. Each of the department stores showed declines, with Dillard's dropping the steepest at 7 percent.
At Gottschalks, Jim Famalette, chairman and chief executive officer, noted the "weak sales in our home store merchandise categories, specifically in furniture, mattresses and textiles." He said that the "overall retail environment remains challenging," reflecting a common view.
Kohl's also blamed the weather, as did J.C. Penney's, which also pointed to "weak housing market conditions, high energy prices, and uncertainty in the mortgage and credit markets." And Tony Buccina, vice chairman and president of merchandising at The Bon-Ton Stores, pointed to "unseasonably warm weather" and a cautious consumer. Nevertheless, differing from some of the other stores, Buccina said that home and furniture were among his firm's "best-performing categories."
A better showing was made by the mass merchants and discount stores, which grew an average of 1.4 percent. Among them Target and TJX showed the strongest gains. Wal-Mart eased up 0.7 percent, although most of that was due to its Sam's Stores component.
