Fall shopping still sluggish at retailers

updated 4:18 p.m. ET Sept. 21, 2005

NEW YORK - Since mid-July, new fall fashions like shrunken brown velvet jackets and Victorian style blouses have been gathering dust on racks at the nation’s retailers.

It’s now almost the end of September, and for many merchants a combination of hot weather, subdued fashions in dark colors, high gasoline prices, and the ripple effects of Hurricane Katrina — have made shoppers stay away from clothing stores.

If sales don’t pick up soon, retailers will be forced to cancel some future fall orders, fueling more concern about consumer spending for the holiday season.

“I am still in flip flops. I am just not there mentally,” said Lina Allocca, from Madison, N.J., who hasn’t been to a mall in more than a month. But when she does return, she will be more frugal given all the economic uncertainty.

“I don’t want to make any impulse buys,” she said. “I don’t want to do anything to put me over the top just because it is cute and trendy.”

Allocca’s concerns are echoed in a new AP-Ipsos poll that says consumers are worried about rising food and gasoline prices.

None of this bodes well for spending, which has been one of the engines driving the nation’s economy.

“I am worried that without some positive offset, what we will have is a continuation of an uneven performance by the retailers, one that is trending lower and lower,” said Michael P. Niemira, chief economist at the International Council of Shopping Centers. On Tuesday, he pared his September sales forecast to a 3.0 percent gain, from 3.5 percent, after a sharp decline last week from the prior week.

Niemira’s estimate is based on sales at stores opened at least a year, known as same-store sales, which are considered a good indicator of a retailer’s health.

Niemira is concerned that the weakness is becoming broad-based with the exception of high-end stores, whose well-heeled shoppers continue to splurge.

“Business has turned really sluggish. There is a lack of traffic in the stores,” said Roseanne Cumella, senior vice president of merchandising at the Doneger Group, a New York-based retail consultancy, which advises major stores on what fashions to buy. “There is overall uncertainty with the economy and gas prices.”

Cumella said that except for upscale stores, her clients, which include discounters and department stores, have struggled with a low single sales drop this month compared to a year ago.

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