Sluggish retail sales as consumers worry about housing market, gas

NEW YORK -- The outlook for the holiday shopping season grew dimmer Thursday after retailers announced disappointing October sales results due to consumers' ongoing worries about the housing slump and higher energy prices.

Mall-based apparel stores like Limited Brands Inc., Pacific Sunwear of California Inc., and Wet Seal Inc. all turned in sluggish sales figures. Wal-Mart Stores Inc., the world's largest retailer, reported sales that were below expectations, despite its aggressive discounting heading into the holidays.

"Overall, the sales trend continues to slow," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "I think the consumer is certainly feeling the (economic) pressure heading into the holidays."

Milder than normal weather also affected sales, wiping out consumers' appetite for winter wear.

With Dec. 25 about seven weeks away, the retail industry is struggling with consumers' eroding confidence and a weakening sales trend amid mounting problems in the economy. Throughout the year, shoppers have been faced with higher gas and food bill and depreciating value of their homes. Tighter credit has also become an issue in recent months.

Wal-Mart posted a 0.4 percent gain in same-store sales, or sales at stores open at least a year. The results were below the 1.1 percent gain expected by analysts polled by Thomson Financial. Same-store sales are a key indicator of a retailer's health.

Costco Wholesale Corp. had a 9 percent gain in same-store sales, well exceeding the 5.7 percent estimate.

Limited had a 6 percent drop in same-store sales, worse than the 1.6 percent drop expected by Wall Street.

Pacific Sunwear had a 0.8 percent decline in same-store sales; analysts expected a 2.8 percent increase.

Wet Seal had a 4.5 percent decline in same-store sales, worse than the 2.1 percent decrease expected.