NEW YORK — Although consumer confidence may be increasing, it’s not showing up at the cash register yet. Many retailers posted disappointing May sales on Thursday, and food and necessities remained high on shoppers’ lists.
According a Goldman Sachs/ICSC tally, overall same-store sales fell 4.6 percent, worse than the 3 percent drop predicted.
The lower-than-expected results did not include Wal-Mart stores, which in recent months has boosted total results but has stopped reporting monthly figures.
Last month’s same-store sales had edged up with Wal-Mart, but excluding the world’s largest retailer, May was the 10th straight month of same-store sales declines, according to a tally by Goldman Sachs and the International Council of Shopping Centers.
The results come amid faint signs that the gloom of recession is lifting. On Thursday, the Labor Department said the number of Americans on the unemployment rolls fell slightly for the first time in 20 weeks, while the tally of new jobless claims also dipped.
In May, the Conference Board’s Consumer Confidence Index rose to its highest level since September. And several retailers including BJ’s and TJX Cos. indicated traffic improved in May.
But that generally did not translate to sales, as job worries and falling home prices are still clearly weighing on consumers as they shop.
Results are a “clear indication that the consumer is not stampeding back to the stores, they’re still being very careful,” said BMO Capital Markets analyst John Morris. “I think the initial panic is over, but now the tough work begins. We’re entering a slow summer period when there’s not a lot to attract consumers into the stores.”
Luxury chains and department-store operators continued to be the weakest sectors, with Saks Inc. and Neiman Marcus reporting double-digit declines. Discounters such as Ross Stores Inc. and teen apparel retailers such as The Buckle Inc. were stronger. Cheap chic discounter Target reported a bigger drop than analysts expected, as apparel and home products continued to be weak sellers.
Overall, necessities like food and health care products continued to be the strongest sellers.
“There’s general softness across the board, as consumers continue to face rising unemployment, falling home values and rising gas prices,” said Ken Perkins, president of retail consulting firm Retail Metrics LLC.
Gas prices rose 30 cents per gallon in May, with the national average for a gallon of unleaded ending the month at $2.36. Still, prices aren’t expected to get near last year’s high of about $4 a gallon.
Wal-Mart Stores Inc.’s absence makes conclusions about the broader economy more difficult, said Perkins, because it accounts for 10 percent of retail spending. “Wal-Mart has been lifting everybody for the last year and half,” Perkins said.
Economists closely monitor consumer spending because it accounts for about 70 percent of U.S. economic activity.
“Consumers are out shopping, but they’re looking for value,” said Janet Hoffman, managing partner of the global retail practice of Accenture.
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