WASHINGTON — Consumers pulled back on spending at department and specialty stores in September, while discounters picked up more business, the monthly retail sales report released by the Commerce Department showed on Tuesday.
Department stores had the weakest month, posting a seasonally adjusted 0.9 percent decline to $14.3 billion, while apparel and accessories store sales fell 0.5 percent to $20.9 billion last month. General merchandise stores, a category that includes discounters and department stores, posted a 0.4 percent gain in sales to $55.2 billion.
On a year-over-year basis, specialty store sales were up 2.7 percent, while sales at general merchandise stores gained 0.6 percent. Department store sales, which have been soft for a while, were 6 percent below September 2012.
In the overall economy, retail sales dipped 0.1 percent to $425.9 billion, driven primarily by a decline in automobile sales.
“Autos, clothing and department stores took a hit in September,” said Chris J. Christopher, director of consumer economics at IHS Global Insight. “Retail sales lost momentum in August after a strong increase in July.”
Bill Lynch, vice president and director of investments at Hinsdale Associates, said rising mortgage interest rates and weak full-time job growth have contributed to a softer economy and slower retail sales.
“Given the strong performance of the stock market, you would expect the so-called ‘wealth effect’ would encourage consumers to make purchases, but that is obviously not having the desired effect that the Fed wants and the economy is still very sluggish,” Lynch said.
Jack Kleinhenz, chief economist at the National Retail Federation, said, “While far from robust, consumers are shopping, but they are spending both discriminatingly and moderately. Volatility still persists in various retail sectors, but spending has somewhat stabilized heading into the all-important holiday shopping season.”
Kleinhenz said falling gas prices and rising housing and stock prices will continue to support consumer spending going into the holidays. The NRF said in its holiday forecast this month that it expects retail sales to rise 3.9 percent over last year, reaching $602.1 billion.
Christopher said the “tremendous loss of consumer confidence” in October, stemming from the political brinkmanship over the debt ceiling and government shutdown in October, does not bode well for holiday sales.
“We expect holiday retail sales to increase 3.4 percent over last year,” he said.