February Was Discount Month

Discount stores drove much of the sales activity in February, leaving retail still trying to sort out the puzzling economic evidence of the last few months.

Overall, as reported by the Goldman, Sachs retail composite index, same-store sales rose 1.6 percent from a year ago, less than January's 3.4 percent gain and well below the 5.1 percent rise in February 2000.

Wal-Mart (Bentonville, Ark.) reported same-store sales gains of 4.3 percent; Kmart (Troy, Mich.) was up 3.3 percent; Costco Wholesale Corp. (Issaquah, Wash.), the nation's biggest chain of warehouse clubs, had a 5 percent increase; Family Dollar Stores (Matthews, N.C.) had a 5 percent gain; rival Dollar General Corp. (Goodlettsville, Tenn.) reported a 4.7 percent increase; and Target Corp. (Minneapolis), the third-biggest discount store, showed a 1.5 percent increase. (Of course, that includes Target's department store operations.).

On the other hand, few gains were posted among specialty and department store chains. Sears, Roebuck & Co. (Hoffman Estates, Ill.), the nation's biggest department store company, said its sales dropped 2 percent. The May Department Stores Co. (St. Louis) posted a 1.1 percent decline. Sales at Federated Department Stores (Cincinnati) fell 1.6 percent. Dillard's (Little Rock, Ark.) dropped 2 percent, and Saks Inc. (Birmingham, Ala.) fell 1.3 percent. J. C. Penney Co. (Plano, Texas) posted a 2.1 percent decline, its same-store sales dropping for the seventh time in the last eight months.

Sales at Gap Inc. (San Francisco), the nation's largest clothing chain, dropped 11 percent and Ann Taylor Stores (New York) fell 6.1 percent. Earlier this month, Neiman Marcus Group (Chestnut Hill, Mass.) – which had seemed impervious to general economic conditions for about three years – had reported that its comp-store sales had dropped less than 1 percent in February.

“It's devastating,” said Kurt Barnard, president of Barnard's Retail Trend Report, of the overall performances of department stores and specialty apparel stores. “Terrible would be a kind word.”

Two exceptions were Kohl's (Menomonee Falls, Wis.), which had a 7.3 percent jump in sales, and Talbots (Hingham, Mass.), which had a 9.3 percent increase.