Retail sales slump in July

NEW YORK — Consumers’ frugal spending extended into a second month during July, giving many retailers lackluster sales gains, particularly at apparel chains including Gap Inc. and mid-priced department stores.

As retailers announced their monthly results Thursday, the bright spots were luxury merchants and discounters like Wal-Mart Stores Inc.

Analysts attributed the overall disappointing sales to a variety of factors, including the end of the mortgage refinancing boom and the continuing impact of higher gasoline prices and grocery bills, which have hurt middle-income shoppers. They said retailers should expect more of this modest sales trend going forward.

High-end stores like Nordstrom and Saks Inc. continued to please Wall Street as well-heeled shoppers have been the first to benefit from the economic recovery.

Seattle-based Nordstrom reported a 6.1 percent gain in same-store sales, or sales at stores opened at least a year. Those sales are considered the best indicator of a retailer’s performance.

Saks reported a 5.5 percent gain in same-store sales, above the 5 percent Wall Street anticipated.

Higher sales also were posted by Spokane-based shopping center River Park Square, where gross retail sales grew 9 percent last month compared with June 2003.

Discounters outperformed many other retailers.

Wal-Mart said it had a 3.2 percent gain in same-store sales in July, virtually in line with the 3.1 percent forecast of Wall Street analysts surveyed by Thomson First Call.

At Target Corp., same-store sales were up 3.8 percent, better than the 2.8 percent estimate from Wall Street.

For many mall-based apparel stores, the month was challenging.

Gap had a 5 percent decline in same-store sales, much worse than the 0.8 percent forecast.

Talbots Inc. had an 8.8 percent decline in same-store sales, worse than the 0.3 percent forecast.

Among more traditional department stores, J.C. Penney Co. Inc. recorded an 8.1 percent gain in department stores, well past Wall Street’s 3.2 percent estimate.

But other department stores struggled. Federated Department Stores Inc., parent company of Bon-Macy’s, posted a 3.7 percent increase in same-store sales, below Wall Street’s forecast of 5.4 percent.

And Sears, Roebuck and Co. had another disappointing month. It recorded a 2.6 percent drop in same-store sales, below Wall Street’s 1.9 percent estimate.

July is one of the least important months of the retailing year and is used by stores to clear out summer goods and to start bringing in fall goods, but it nonetheless reflects consumer trends entering the critical back-to-school period.