RETAILING Stores find other items sell better than apparel

Target increases its food offerings and reduces men's clothes and sporting goods.
MINNEAPOLIS (AP) -- For years, department stores' bread and butter was the clothes. But now many retailers are finding that foot traffic is driven by other goods -- groceries, furnishings and automotive products are increasing their presence, shoving aside apparel.
Analysts say many retailers are likely to follow the lead of Target Corp., which is adding food at the expense of space for men's clothes, sporting goods and other items.
"Apparel today is not the great attraction for consumers as it was even 10 years ago or 15 years ago," said Kurt Barnard, president of Barnard's Retail Consulting Group, based in Montclair, N.J. "And the companies hit the most by this are the traditional department stores."
Sales drop
Apparel sales -- including footwear and accessories -- fell 2 percent in 2002 to $220 billion, according to NPD Group, a Port Washington, N.Y.-based firm that tracks U.S. retail sales. It was the second consecutive year of decline, following annual gains of as much as 4 percent in the 1990s.
Meanwhile, food sales jumped 8 percent and electronics rose 2 percent in 2002, according to NPD. That has left many executives pondering changes.
Many stores rely on apparel for nearly 80 percent of sales, but with apparel expected to continue its decline, some are looking elsewhere for gains. Barnard calls the dilemma facing retailers "the big conundrum."
"They don't know what to do," Barnard says. "They are trying to make themselves more attractive."
Shifting focus
Last week, Cincinnati-based Federated Department Stores Inc. announced it was shifting focus to private labels and home furnishings to attract upscale shoppers. The nation's largest department store chain, Federated is the parent company of Macy's and Bloomingdale's.
In recent years, TJ Maxx began offering more housewares and home furnishing products.
To be sure, nobody is ready to abandon apparel. Sears, Roebuck and Co. spokeswoman Jan Drummond points to her company's recent additions -- the Covington and Lands' End clothing lines.
"We're not contemplating adding categories or making any changes in response to apparel sales one way or the other," she says. "We're carrying out a strategy that we embarked on a couple of years ago."
Meanwhile, Minneapolis-based Target, which announced its new strategy last week when releasing first-quarter earnings, said it will double the snack and beverage items and add more dairy and frozen foods in food departments. To make room, the company will squeeze its men's apparel, home improvement, automotive and sporting goods departments.