HOLIDAY SALES Bad news from Wal-Mart, Federated

Retailers will face flat sales in 2003, analysts say.
NEWSDAY
NEW YORK -- Two of the United States' largest retailers, Federated Department Stores and Wal-Mart Stores Inc., issued more bad news about holiday sales, adding to beliefs that this shopping season will post the smallest gains in three decades.
Cincinnati-based Federated, which owns Macy's and Bloomingdale's and is the country's largest operator of department stores, said Monday it expects results for the holiday period to fall about 4.5 percent compared with the same period last year, a steeper drop than expected.
Wal-Mart, the nation's largest retail chain, said in a statement from its Bentonville, Ark., headquarters that sales at stores open at least one year inched up as little as 2 percent. That was the low end of Wal-Mart's forecast.
Not all the news was bleak. Plano, Texas-based J.C. Penney Co. said sales at its stores open at least one year rose in December by 4.5 percent.
Despite the mostly disappointing news, shares of all three retailers rose Monday. Wal-Mart shares jumped $1.48 to close at $50.64; Federated climbed 56 cents to $28.08; and Penney gained 82 cents to $22.89.
Veteran retail analysts said they were not surprised by the results at Federated or Wal-Mart, and they predicted that sales may continue to be flat well into the new year.
"I think 2003 will be a year to muddle through" for retailers, said Kurt Barnard, president of Barnard's Retail Consulting Report in Upper Montclair, N.J.
Worried consumers
Many major retailers struggled through what they said was the slowest shopping season since the early 1970s, despite deep discounts on virtually all apparel and electronic goods.
Consumers held on to their wallets and pocketbooks as they worried about rising unemployment, higher oil prices, a weak stock market, the potential of terror attacks, and the possibility of a U.S.-led war against Iraq.
In a report Monday, ShopperTrak RCT, a Chicago-based firm that tracks data from more than 30,000 retail stores across the country, said sales for the week that ended Saturday dropped 9.4 percent from the previous week.
ShopperTrak said total retail sales will rise only 1 percent in December, the smallest year-over-year monthly gain since September 2001, when the terrorist attacks hurt consumer spending.
Reduced forecast
The National Retail Federation, a Washington, D.C.-based industry trade organization, has reduced its sales forecast for stores in the November-December period to a 3.5 percent gain over the same period last year, from 4 percent previously.
Spokesmen for Federated and Wal-Mart said low prices did not attract enough customers. As a result, Michael Niemira, an economist for Bank of Tokyo-Mitsubishi Ltd., said he anticipates holiday sales to rise only 1.5 percent from a year earlier, the smallest gain since 1970.