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Retailers post strong sales
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June 3, 1999: 12:36 p.m. ET
May same-store sales up 7.7% at Wal-Mart; electronics sales soar
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NEW YORK (CNNfn) - Consumers continued to open their wallets and spend freely on clothing, electronics and other merchandise last month, with some of the largest discount and specialty retailers reporting big jumps in sales Thursday.
The world's largest retailer, Wal-Mart Stores Inc. (WMT), and other discounters reported healthy gains in same-store sales, or sales at stores open at least a year. Wal-Mart's sales rose 7.7 percent over last year, while sales at Dayton Hudson (DH), the operator of Target Stores, were 6.3 percent higher than in May 1998.
One sector recording especially high sales were electronics merchants. Tandy Corp. (TAN), operator of the Radio Shack chain, said same-store sales surged 17 percent, while Best Buy Co. (BBY) posted a 13.3 percent jump.
The monthly increases, across the board, are even better than expected for U.S. retailers, retail analyst Patrick McCormack of BT Alex. Brown told CNNfn.
"It's a little bit surprising," he said. "We weren't thinking that it would be quite as good as it is this month."
"The consumer continues to feel confident," said Asma Usmani, a retail analyst at Edward Jones. Even the department stores, which have struggled to gain momentum, fared well, she said.
However, retailers are wary that the Federal Reserve may raise short-term interest rates to stem inflation, Usmani said. If that happens, she said, consumer spending likely will slow down, with specialty retailers and department stores hit the hardest, while discounters and drug store chains probably would fare better among consumers looking for bargains and staple goods.
"If we were to see a slowdown, these are the two industries that would perform well going forward," she said.
Among other retailers, Sears Roebuck and Co. (S) said its same-store sales were up 1.9 percent for the month, while Kmart Corp. (KM) posted a 3.7 percent increase. Federated Department Stores (FD), operator of Bloomingdales and Macy's, said its same-store sales rose 4.1 percent, while May Department Stores (MAY) said sales rose 2.9 percent.
As for specialty apparel chains, The Gap Inc. (GPS) said same-store sales surged 8 percent, while AnnTaylor (ANN) recorded a 10.1 percent jump.
Drugstores also posted strong gains. Rite Aid (RAD) said its sales rose 9.9 percent; sales at Walgreen Co. (WAG) leaped 11.3 percent.
The monthly sales figures for May are particularly impressive for U.S. retailers because, for the most part, they don't include Memorial Day, analysts said.
Most of the sales associated with the holiday will be included in the retailers' June results. 
-- from staff and wire reports
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