NEW YORK (AdAge.com) -- Retailers had little luck enticing shoppers in January, leading sales to plummet across categories.
From luxury purveyors such as Saks Fifth Avenue to value-oriented players such as Old Navy, plunging sales were the rule. One bright spot was specialty teen retailers, with chains such as Aeropostale, Hot Topic and The Buckle posting gains that outstripped discounter Walmart.
Weak consumer confidence, wintry weather and fewer gift-card redemptions contributed to a tough month, analysts say. The International Council of Shopping Centers reported a 1.6% decline in overall retail sales for January, compared with the year-ago month. January also marked the fourth consecutive month of declining sales. And it's not likely that the pain will subside anytime soon, as consumers move into survival mode.
Among department-store players, Macy's fared best, with a same-store sales decline of 5%. JCPenney saw sales plunge 16%, while Kohl's reported a 13% decline. Luxury players were also hard hit, with Saks Fifth Avenue and Neiman Marcus posting 24% declines, while Nordstrom saw a 13% decline.
Not all teen retailers thriving
Specialty teen retailers proved to be a rare bright spot, although Abercrombie & Fitch and American Eagle both stumbled, with declines of 20% and 22%, respectively. Analysts said teens were receptive to deep discounts. Aeropostale, for example, also benefited from a new gift-card distribution effort that put its cards into grocery stores.
"We believe Aeropostale has continued to capture material market share from a somewhat befuddled American Eagle," said Eric Beder, an analyst with Brean Murray, Carret & Co. "Further, the chain was one of the few players to capitalize on a strong holiday season to drive some level of newness in January."
Analysts noted that sales trends worsened throughout the month but also pointed out that January is a typically slow month. "In the quarter's smallest, non-material month, January merely represents the icing on the cake that had already been baked in December," Todd Slater, managing director at Lazard Capital Markets, wrote in a research note.
Consumers are buying what they need, not what they want, pointed out Mr. Slater. And, with few reasons to shop in February, that trend is likely to continue. ICSC expects overall retail sales to decline between 1% and 2% next month.
Consumers becoming more self-reliant
"Clearly, we believe customers are becoming more self-reliant, eating and entertaining at home and, for instance, even performing their own basic vehicle maintenance. In fact, automotive was strong," a Walmart spokeswoman said during a sales call.
Sales at stores open at least a year rose 2% at Walmart. Discount rivals Costco and Target posted sales decreases of 2% and 3%, respectively.
"The lingering recession will continue to be a drag on spending in the months ahead," said Michael Niemira, ICSC chief economist and director of research. "ICSC anticipates that 2009 will be a transition year for retailers as sales will remain down for the first half of the year and positively improve toward the end of 2009."