Retailers Post Small Sales Gains Shoppers Curtail Spending As Chains Limit Promotions

Easter shoppers decided to pass up that new dress or coat last month after the nation’s retailers didn’t lower their prices as much as consumers expected.

That left merchants with only modest March sales gains, a performance well below expectations.

“We are seeing consumers today are generally willing to buy, but they must be given an incentive,” said Kurt Barnard, president of Barnard’s Retail Marketing Report, a retail consulting firm. “That reward is a very low promotional price.”

Hardest hit were department stores and specialty apparel merchants that depend largely on purchases of seasonal items. Federated Department Stores Inc., parent of The Bon Marche and other chains, and May Department Stores Co. faltered last month, as did Gap Inc. and Limited Inc.

Even upscale retailers, which have outperformed most other stores recently, saw sales slow in March. Saks Fifth Avenue had only a modest increase in business after months of big gains.

Overall, the results were surprisingly weak, given the fact that Easter fell in March this year after having fallen in April last year. Retailers and analysts had expected consumers to do their spring shopping early because of the calendar shift.

However, “the response to spring lines has been tepid,” said Robert Buchanan, a retail analyst at NatWest Securities. “And that may indicate how the rest of the season will go.”

The big winners of March were merchants selling merchandise for the home as consumers began to purchase goods for spring cleaning. Wal-Mart Stores Inc., Kmart Corp. and Dayton Hudson Corp.’s Target stores all had healthy gains in March.

While shoppers shied away from retailers not offering markdowns, analysts said the fewer price cuts in March will help merchants post better earnings in the first fiscal quarter, which for most retailers ends in April.

The Salomon Brothers retail index, the investment firm’s barometer of sales performance, rose 4.4 percent last month after a 4.7 percent gain in February. In March 1996, the index rose 5.4 percent.

Wal-Mart, the nation’s largest retailer, said its sales from stores open at least a year rose 7.2 percent from a year earlier, while total sales rose 13.5 percent.

Sales from stores open at least a year, known as same-store sales, are considered the most accurate measure of a retailer’s strength. They exclude sales from stores that have been closed and from new stores, which often have disproportionately strong sales.

Sears, Roebuck and Co. said its same-store sales rose 1 percent, while total sales rose 6.5 percent. Kmart’s same-store sales rose 12.7 percent, while total sales were up 11.1 percent.

Dayton Hudson Corp. said samestore sales increased 1.9 percent and total sales rose 7.8 percent. Same-store sales at Target rose 3.5 percent and total sales rose 12.1 percent, while sales remained weak at its Mervyn’s clothing stores and its three department store chains.

Federated said its same-store sales fell 0.2 percent and total sales gained 1 percent.

Limited said same-store sales fell 6 percent and total sales were unchanged. Gap said same-store sales fell 3 percent from a year ago, while total business was up 11 percent.

These figures are narrower than retail sales numbers released by the Commerce Department, which also reflect sales at restaurants and auto dealers. The government’s retail sales figure will be released today.