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Friday, October 06, 2000

Buyers flock to discounts


Value-price retailers lead in September sales

By Lisa Biank Fasig
The Cincinnati Enquirer

        When the nation's retailers added up their moderately higher sales receipts for September, the spending patterns of shoppers such as Jeannie Niebuhr materialized like yards of this fall's popular plaid.

        While the Eastgate mother did shop more in September compared with last year, Mrs. Niebuhr said she did most of her shopping at value stores such as Kohl's, Target and Old Navy. The only department store she visited was Lazarus, expressly to buy a new private label for her girls.

Niebuhr
Jeannie Niebuhr
        “We find the quality of the merchandise is just the same at those stores,” she said of the value chains. “I love the fact that it's kind of one-stop shopping. For the price and for the quality, it's so much easier.”

        The tactics of shoppers such as Mrs. Niebuhr helped shift spending reports years ago, as lower-priced chains began stealing market share from the department stores and specialty chains that couldn't hold up. In September, it was no different. The retailers that offered the best value and product stood out, as shoppers kept a wary eye on rising fuel prices and interest rates.

        “If you give the customer a reason to be in the store, they're going to be there,” said Jeff Stinson, an analyst with Midwest Research Maxus Group in Cleveland. “Those retailers that do a really good job with attracting traffic — your Kohl's, intimates, even your type of teen-age stores — they put up some really good numbers.”

HOW THEY DID
    September same-store sales reported by the five largest U.S. retailers (sales compare current year's sales with the previous year's):
    • Wal-Mart Stores, up 4.8 percent.
    • Kmart, up 2.4 percent.
    • Target (formerly Dayton Hudson), up 2.9 percent. The Target division was up 3.5%.
    • J.C. Penney, down 4 percent (Penney stores only).
    • Sears, Roebuck and Co., up 3 percent.

        The Bloomberg same-store sales index has risen 3.57 percent so far this year, compared with last year. Discounters lead with a 4.61 percent index increase. The specialty-apparel index advanced 1.87 percent, and the department store index rose 1.04 percent.

        Among the September standouts are Columbus-based Limited Inc., which posted a 10 percent sales increase at stores open at least a year. Same-store sales at Kohl's Corp. rose 9.8 percent and Costco Wholesale Corp. reported a same-store sales increase of 7 percent.

        Of the disappointments: Gap said sales at stores open at least a year declined 8 percent.

        In the department store sector, Cincinnati-based Federated Department Stores outperformed its category with a 2.9 percent same-store sales increase. Total sales at the Lazarus parent rose just 2.2 percent, however, because of a drop in direct-to-consumer sales.

        “That reflects what we said would happen with Fingerhut, with the lower sales,” vice president Carol Sanger said, referring to a July warning that Federated's efforts to stem credit delinquencies at Fingerhut could soften catalog sales.

        Other department stores did not do as well. Dillard's Inc. posted a sharp, 6 percent drop in same-store sales, while Dayton, Ohio-based Elder-Beerman Stores Corp. said its sales slipped 1.8 percent. Same-store sales at Saks Inc. rose 3.3 percent, led by its Saks Fifth Avenue and catalog division. But its department store group, including Parisian, posted a decline of 0.6 percent.

        As the indexes show, discounters performed markedly better. Wal-Mart said its same-store sales rose 4.8 percent. Target Corp. said sales at its Target store division rose 3.5 percent, and Kmart said sales rose 2.4 percent.

        All of which supports the nation's appetite for value, if not its concern over the economy.

        “I think people are going to realize that some of the prosperity is not going to stick around,” Mrs. Niebuhr said.'

       



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