Discounters warm up chilly January sales

? Wal-Mart Stores Inc. and other discounters outperformed the rest of the retail industry during January as economic uncertainty again sent consumers in search of low-priced merchandise.

Retailers reporting monthly sales Thursday also said business was hurt by winter storms in the Midwest.

Department stores, particularly May Department Stores Inc., and apparel chains, including Gap Inc., continued to struggle throughout the month, which usually is a transitional period to clear out inventory and move in spring goods.

Topeka-based Payless ShoeSource Inc. reported a 10.3 percent drop in January sales at stores open at least a year. Total sales were $138.3 million, down 27.4 percent from the five-week fiscal January a year ago.

“Americans are not yet ready to go on spending sprees and buying binges, particularly at department stores,” said Kurt Barnard, president of Barnard’s Retail Trend Report. “They are willing to spend if the prices are real bargains.”

The Bank of Tokyo-Mitsubishi Ltd. index measuring the sales of 72 stores rose 5.1 percent in January, better than the 3 percent projected by Michael Niemira, a bank vice president. The gain was the strongest monthly showing since January 2000, when the index rose 5.7 percent.

Missing from the tally was Kmart Corp., which filed for bankruptcy Jan. 22.

Wal-Mart posted an 8.3 percent gain in same-store sales, considered the best indicator of a retailer’s health. Analysts polled by Thomson Financial/First Call expected Wal-Mart to report a 6.2 percent gain. Total sales were up 13.8 percent.

J.C. Penney Co. posted a 5.9 percent gain in same-store sales in its department store division. Analysts expected an increase of 4.9 percent. Total sales were up 4.1 percent.

But there were disappointments.

Gap recorded a same-store sales drop of 16 percent, worse than the 13 percent decline that Wall Street analysts projected. Total sales were down 5 percent.