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Retailers post gains
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February 13, 2001: 8:48 a.m. ET
January sales rose 0.7%, government report says, ahead of expectations
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NEW YORK (CNNfn) - Retail sales rose 0.7 percent in January, the government reported Tuesday, ahead of analysts' expectations as retailers offered big holiday closeout sales to clear out leftover inventory.
Retail sales excluding durable goods, such as cars and appliances, increased in January to $273.3 billion, up 0.7 percent from December and 3.5 percent over the same period a year earlier.
Retailers faced a tough 2000 as the economy continued to slow in the wake of high energy prices, rising interest rates, fears about layoffs and severe weather that kept people away from the malls.
The sluggish environment forced most retailers to slash prices during the crucial holiday period in December, which helped drive sales but at much lower margins, which hurt profits.
The same held true in January as retailers, saddled with more leftover holiday inventory than in past years, continued to offer big promotions, further cutting into profits.
Analysts had expected retail sales to increase 0.5 percent in January, a higher rate than the 0.1 percent increase reported in December, a time when sales typically are among the highest of the year, according to Briefing.com.
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Last week, retailers individually reported January sales, with most saying sales at stores open at least a year, a closely watched figure known as same-store sales, increased on the strength of those promotions.
The biggest chains, Wal-Mart (WMT: Research, Estimates), Kmart (KM: Research, Estimates), Sears (S: Research, Estimates), Federated Department Stores (FD: Research, Estimates), Target Corp. (TGT: Research, Estimates) and Kohl's (KSS: Research, Estimates) all posted gains in January, in large part due to deep discounts. An exception to the deep discounts may have been Kohl's, which Wall Street smiles on as a company that has bucked the retail trend of late.
Analysts expect the Fed's recent interest rate cuts to help retailers, but the effects likely won't be felt at least until the second half of the year, just in time for the next holiday season.
Stocks could get a boost Tuesday when Fed Chairman Alan Greenspan testifies before the Senate Banking Committee, where he could drop hints as to the Fed's future moves regarding interest rates ahead of the board's March meeting. 
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