Stores post disappointing January sales
New York – Here’s a sign of how shaky the economy has become: Wal-Mart (NYSE:WMT) says its shoppers are redeeming their holiday gift cards for basic items — pasta sauce, diapers, laundry detergent — instead of iPods or DVDs.
Merchants had hoped shoppers armed with gift cards would provide a lift after a dismal holiday shopping season — partly because shoppers tend to spend even more than the value of the card. But that didn’t seem to happen last month, and retailers are feeling the pain.
On Thursday, the nation’s retailers turned in their worst January in almost four decades as high gas and food prices, a slumping housing market, tighter credit and a tougher job market pushed consumers to the edge.
Sales at 43 retailers surveyed by the UBS-International (NYSE:UBS) Council of Shopping Centers rose just 0.5 percent in January, well below the original 1.5 percent forecast.
The results — based on sales at stores open at least a year — followed an anemic 0.7 percent pace in December and were below the 2.1 percent gain for all of last year.
Jill Panell, a 26-year-old homemaker from Sterling Heights, Mich., was using a $20 Wal-Mart gift card on Thursday to stock up on groceries and pet supplies. She wasn’t in the market for a present for herself.
‘Twenty dollars at Wal-Mart is easy to spend,’ she said.
Analysts think it’s happening in other stores, too.
