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Store sales slow in January

By Parija Kavilanz, senior writer

NEW YORK (CNNMoney) -- Retailers logged slight increases in store sales last month as consumers primarily focused on paying for grocery and gasoline purchases, the government reported Tuesday.

The Commerce Department said total retail sales rose 0.3% last month.

Economists surveyed by Briefing.com on average had forecast an increase of 0.5% for January, compared to a 0.6% gain in sales the prior month.

Despite missing expectations, the January increase was the seventh consecutive gain in the government measure, indicating that consumers have been more comfortable shopping for discretionary goods in recent months that they were a year ago.

"January is generally a clearance month for leftover holiday merchandise," said Ken Perkins, president of sales tracker Retail Metrics.

"Consumers also typically take a breather in January. That is more the case this year, especially after the shopping strength that we saw in both November and December," he said.

"So I wouldn't be too concerned about the softer increases in the month," Perkins said.

Sales excluding autos and auto parts also rose a weaker-than-expected 0.3%, compared to a 0.5% increase in ex-auto sales in December.

Economists had forecast a rise of 0.6% in the measure for January, according to Briefing.com.

The government report showed gasoline station sales increased 1.4% in January, boosted by higher gas prices in recent weeks. Grocery store sales also increased 1.4% in the month while online sales rose 1.2%.

But sales at electronics stores increased a modest 0.3%. Sales were up 0.5% at department stores and up 0.8% at general merchandise sellers.

Offsetting those increases, building material sales slumped 2.9%, and sales at sporting goods and music stores fell 1.3%. Also, furniture store sales dipped. And consumers cut back on new clothes, resulting in a 0.3% decline in apparel store sales.

The National Retail Federation, the industry's largest group said in a statement Tuesday that a sustained uptick in retail sales will depend on the direction of economy.

"In spite of the economic uncertainties that still exist, consumers are clearly demonstrating their desire to spend on discretionary items once again," federation CEO Matthew Shay said Tuesday.

Factors, including stock market gains, tax cuts, income growth and savings built up during the recession are contributing to the recent increase in consumer spending, the group said.

"The industry is certainly benefiting from the renewed confidence we're seeing in shoppers, although sustained growth in 2011 will largely rely on improvement in key economic indicators like employment and housing," Shay said. To top of page

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