Discounters continue to drive retail sales

By Andrea Lillo -- Home Textiles Today, 9/7/2001 4:46:00 PM

New York — Retailers this month used everything in their arsenal to battle their way through the rough retail waters. Inventory management, changes in pricing and merchandise assortment and Back-to-School sales gave chain stores a boost.

In this environment, dollar and discount stores, with their value-priced assortments, continued to attract consumer's dollars

In fact, Family Dollar noted that if the difficult economy continues and consumer spending remains focused on lower-priced items, the company will expect first-half net income to increase by about 10 percent from a year earlier. Though most of its sales are derived from the hardlines area, the discounter saw softlines sales grow 0.7 percent for the month of August. However, for the comparable 52-week period, sales of softlines have decreased 7.0 percent.

"In this challenging environment, Family Dollar continues to report strong sales, gain market share and increase profitability," said Howard Levine, president and ceo.

Though most department stores struggled with negative comp store sales, JCPenney shone with a positive 7.5 percent comp-store sales in its department stores, which saw August sales benefit from planned marketing events targeted at Back-to-School. Home furnishings was also among the best performing merchandise categories for the month, along with women's apparel, children's and fine jewelry.

Kohl's comp-store sales grew by 4.9 percent, which ceo Larry Montgomery noted was on top of a 9.1 percent comparable-store sales increase a year ago.

Sears recorded a slight comp-store sales increase of 0.2 percent, which chairman and ceo Alan Lacy called a "modest improvement from recent trends. In full-line stores, appliances and home decor delivered double-digit increases over last year."

There was also plenty of double-digit growth when comparing August 2001 with the same period last year. Gottschalks leapt ahead with a 22.5 percent growth, followed by Jo-Ann Stores (20.3 percent), Ross Stores (20.2 percent), Family Dollar (19.6 percent) and Kohl's (18.0 percent).

Retailers also looked to entice consumers by reducing prices on everyday items and changing the merchandise assortment, while continuing to monitor inventory levels. "During this past month, we experienced growth as increases in Back-to-School supplies and high-frequency categories were offset by our new lower prices under the BlueLight Always program," said Chuck Conaway, chairman and ceo, Kmart.

Ross Stores cited its new initiatives as part of the reason for a 20.2 percent sales growth. "We believe that customers are responding favorably to the steps we have taken over the past several months to strengthen our merchandise offerings," said Michael Balmuth, vice chairman and ceo. "These include increasing the levels of nationally recognized name brand product, creating a more balanced mix of ladies career vs. casual apparel, and adding more diversity in our home assortments."

And at TJX Cos., August sales exceeded expectations, said Edmond English, president and ceo. "Sales were strong throughout the month with both apparel and home categories performing well. Overall, our inventories are in great shape, and we are taking advantage of the many off-price buying opportunities in the marketplace."

Jo-Ann Stores said its sku reduction benefited sales.