In what economists said might signal a long-desired turnaround in spending, several of the nation's big merchants reported Thursday that customers picked up their buying pace in May.
Overall, analysts said, the three largest mass-merchant chains--Sears, Roebuck & Co., K mart and J. C. Penney--were fairly pleased with their results, which were buoyed by sales of apparel and big-ticket items such as appliances and furniture.
Some department store companies were less exuberant, however, indicating that sales just met expectations or in some cases were slightly below, industry experts said.
As a group, retailers showed modest improvement in sales over April, analysts said, and a healthy gain of nearly 7% over May, 1985. To Allen Sinai, senior vice president and chief economist at Shearson Lehman Bros. in New York, the sales gains, modest as many of them were, "suggest that consumers were out and spending in May, consistent with a continuing driving of economic growth by the consumer sector."
The increases follow about a year of mediocre results. Sinai noted that because of lower energy prices and the refinancing of mortgages at lower interest rates, Americans have more spending money.
Sears, the nation's largest chain, said sales for the four weeks ended May 31 rose 3.5% over the same period last year. That was a marked improvement over the scant gains or declines reported recently.
K mart, the nation's second-biggest chain, showed a 5.1% rise, part of which was generated by new stores. Sales for the period at so-called comparable stores--those open at least one year--matched Sears' 3.5% improvement.
Third-ranked J. C. Penney reported an 8.4% increase on what it characterized as a steady sales pace, with performances strongest in the East and Southeast.
Sandra Shaber, an economist with Chase Econometrics in Bala Cynwyd, Pa., said retailing has experienced a "pretty decent expansion" since the beginning of the year.
"Certainly, that will have to continue if we're to get the overall improvement that's expected in the second half," she added. "Particularly in areas like furniture and appliances, we'll see more growth because people will be furnishing the homes they've been buying."
Dayton Hudson Corp., the Minneapolis-based parent of Mervyn's and Target, expressed disappointment with its 9% overall gain and 3.9% improvement at comparable stores.
"We did not see any sign of a pickup in spending in May," said Kenneth A. Macke, chairman and chief executive. "Consumers still appear to be feeling the impact of slower growth in personal income as well as high levels of installment debt."
Results at Los Angeles-based Carter Hawley Hale Stores were about in the middle for department store companies. The retailer, parent of the Broadway and Neiman-Marcus, showed a 5.2% increase.
For the first three months of the fiscal year, the gain was 3.7% over the same period last year. Among stores open at least a year, the gain was a more modest 4%.
Edward Johnson, an industry analyst with Johnson Redbook Service in New York, said retailers showed an average increase of about 6.7% over May, 1985.
"You've got to remember that this 6.7% has very little inflation," he said, "so (the results) show good unit growth." In past years, many of the retailers' sales gains have resulted from rising prices.
Sinai noted that the increased volume bodes well for retailers' profits.
Major Retailers' Sales in May
In millions Year % of dollars 1986 ago change Sears 2,226 2,150 +3.5 K mart 1,898 1,806 +5.1 J.C. Penney 937 864 +8.4 Federated* 599 577 +3.8 Dayton Hudson 655 601 +9.0 Wal-Mart Stores 952 654 +46.0 Woolworth 274 260 +5.5 Montgomery Ward 324 321 +1.0 May Dept. Stores 396 356 +11.3 Assoc. Dry Goods 354 329 +7.7 Carter Hawley Hale 272 259 +5.2
*Excludes supermarket sales. Excludes foreign sales.