Discount stores do well in October

NEW YORK -- Consumers stayed frugal in October -- not even Halloween or big discounts persuaded them to spend -- and the nation's big retailers were left with another disappointing month.

Discounters and other moderate-priced chains reported the best results Thursday as retailers announced their monthly sales. Shoppers bypassed mall-based apparel stores, which meant companies such as AnnTaylor Stores, Abercrombie & Fitch and Gap Inc. again languished.

Consumer spending stalled after the Sept. 11 attacks and never fully rebounded to the prior levels in the sluggish economic environment. Retailers tried to lure them last month with deep discounting and special sales promotions, but with little success.

Spending on Halloween items, usually a big boost to business in October, was down, affecting stores including Kmart Corp.

"After Sept. 11, consumers began to shun malls out of concern about being in large places," said Kurt Barnard, president of Barnard Retail Trend Report, based in Upper Montclair, N.J. "And when they do go, they spend less out of concern for losing their jobs."

Consumer spending is critical to an economic recovery because it accounts for about two-thirds of the gross domestic product.

In a separate economic report, the Labor Department said new claims for state unemployment insurance fell sharply last week but remained high enough to suggest that the attacks and the sinking economy sapped demand for some workers.

Wal-Mart Stores Inc., which continues to take market share away from department stores, reporting a robust 6.7 percent gain in sales at stores open at least a year. That beat the 5.2 percent consensus forecast of analysts surveyed by Thomson Financial/First Call.

Sales at stores open at least a year, known as same-store sales, are considered the best indicator of a retailer's strength.

Wal-Mart's total sales were up 14.6 percent.

Some other selected October sales figures for leading retailers:

Dollar General Corp.: Same-store sales up 8.5 percent; total sales up 19.1 percent.

Federated Department Stores Inc.: Same-store sales down 8.7 percent; total sales down 8.9 percent.

Kmart Corp: Same-store sales down 4.4 percent; total sales down 4.9 percent.

Saks Inc: Same-store sales down 6.4 percent; total sales down 9 percent.

Target Corp.: Same-store sales up 2 percent; total sales up 8.9 percent.