April decline surprises

By Don Hogsett -- Home Textiles Today, 5/19/2003 12:00:00 AM

WASHINGTON —

Taking an unexpected dive, retail sales slipped by 0.1 percent in April, the Commerce Department reported, confounding economists who had been expecting a gain in the range of 0.4 percent.

And in even worse news, the overall total was propped up by surging car sales, which spiked up by 2.5 percent. Pull those car sales out of the picture and retail sales skidded down by 0.9 percent, the biggest one-month drop in 19 months, since September 2001, when sales tumbled by 1.2 percent in the aftermath of terrorist attacks in New York and Washington.

Skewing the picture somewhat, and putting downward pressure on the total, was a big 5.9 percent drop in gasoline sales, the product of falling oil prices and lower prices at the pump rather than an actual drop in demand.

But that skewing factor aside, sales still fell in most key categories, with apparel stores the hardest hit, sales declining by 3.2 percent to their lowest level in months. Another big decliner was department stores, down 1.4 percent, as cold and soggy weather chilled out sales of seasonal apparel, putting a damper on the Easter holiday season.

Results were mixed for home-related retailers. Furniture and home furnishings stores reported sales declined by 0.3 percent. But electronics and appliance stores said sales edged ahead by 1.0 percent. Unseasonably cool and damp weather put spring cleaning on hold and kept do-it-yourselfers indoors, depressing sales at building material and garden equipment outlets by 0.2 percent.

Consumers traded down from steak to hamburger, and grocery store sales declined by 0.2 percent. With consumers increasingly protective of their discretionary dollars, cutting out non-essentials, sales in restaurants and bars, usually fairly stable, dropped by 0.5 percent.

Retail sales in April (by channel)