September Sales Reflect Shoppers Buying Basics.

Retail sales in September offered no surprises, as the traumatic events of Sept.11 caused a paralysis of shopping activity in the days immediately following the attack and consumers focused on buying necessities. The National Retail Federation (NRF), responding to figures released today by the U.S. Commerce Department, noted that although total retail sales dropped sharply 2.4 percent from August, they were up a slight 0.2 percent from a year ago, suggesting that the attacks may not have caused irreparable damage.

“Consumers have shied away from discretionary purchases. Retailers offering staple goods and those appealing to cost conscious consumers fared better than luxury retailers,” said NRF Chief Economist Rosalind Wells. “Recently, consumers have begun to pry themselves away from their televisions and are slowly returning to the stores. The patterns that have emerged so far, however, are the result of a very cautious consumer — impacted both by a slumping economy and fear of the future.”

As evidenced by the stepped-up shopping behavior seen in the last week of September and over the Columbus Day holiday, consumers are beginning to return to their routine spending habits. Shoppers were out in larger numbers at malls, taking advantage of extensive fall promotions and discounts. Wells maintains that this activity should gain further momentum as the winter holiday season approaches.

In September, sales in the GAF category (general merchandise, apparel, furniture, home furnishings, electronics and appliance stores) fared a bit better than other segments. GAF sales dropped 1.9 percent seasonally adjusted from August. The hardest hit categories within GAF were apparel, furniture, home furnishings and electronics stores. However, sales at general merchandise stores remained the most stable. They were off only 0.4 percent from August and up 0.3 percent from a year ago.

“Since the economy will remain weak for the balance of the year and uncertainty will continue to surround the war against terrorism, we expect these trends to continue,” added Wells. “However, sales in the coming months will certainly rebound from September’s depressed levels.”

“The Columbus Day weekend brought many consumers out of their shells,” said NRF President and CEO Tracy Mullin. “The fear and shock is beginning to wear off and consumers are sending a clear message that they are ready to resume their lives and do their part to support the economy.”

In addition, the Federal Reserve’s recent interest rate cuts and the economic stimulus package being crafted by the White House and Congress should provide more discretionary income and tax relief that would put cash back into consumers’ pockets as soon as possible.

For more information at http://www.nrf.com.

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