WASHINGTON — Consumers pulled back on retail spending in February as threats of war with Iraq mounted and snowstorms slammed the East Coast, the Commerce Department’s retail sales tally revealed Thursday.

This story first appeared in the March 14, 2003 issue of WWD. Subscribe Today.

Sales at clothing and accessories stores plunged a seasonally adjusted 3.6 percent last month to $14.37 billion against January, and fell 1.5 percent against February 2002. Sales at department stores last month rose slightly by 0.3 percent to $18.29 billion, while sales at general merchandise stores rose 1.2 percent to $39.1 billion.

Continuing the pattern of year-over-year declines in February, sales at department stores plunged 5 percent, while sales at general merchandise stores rose 3.7 percent.

“The steep month-to-month falloff [in apparel and accessories store sales] is disturbing but not unexpected and we do expect most apparel channels to show further signs of weakness as consumers grow more uncertain and pull back in the face of war, job prospects and dim prospects for growth,” said Frank Badillo, senior economist at Retail Forward.

Badillo noted department store sales held their own on a month-to-month basis, due primarily to stronger sales from discounters, which are grouped together with conventional mall-based department stores. Badillo said there has been a “divergence” in same-store sales reports, which have shown a far greater weakness than the government’s sales figures.

“A lot of that has to do with the fact that same-store sales are weighted more toward mall-based stores, which tend to be public companies, whereas the industry numbers reflect more off-price apparel stores, which are doing better than mall-based stores,” Badillo said.

Overall, retail sales plunged 1.6 percent in February, marking the largest decline since November 2001.

“The economy is going through a rough patch and it continues to absorb bad news, such as the employment report and continued tensions in the Middle East, and now another report shows that consumers are staying away from shopping malls for whatever reason,” said John Mothersole, senior economist with Global Insight. “It certainly adds to the picture of an economy treading water or struggling to maintain momentum.”

Mothersole also noted that soaring energy prices have hit consumers’ pocket books due to the threat of war with Iraq, which in turn has dampened consumer spending.

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