Retailers post weak April sales as gas prices, housing market lead consumers to cut back

NEW YORK — The outlook for consumer spending in the coming months grew dimmer Thursday after big retailers stumbled in April, their sales hurt by rising gasoline prices and the weak housing market.

As retailers released their monthly sales figures, weak performers cut through all segments of the industry and included Wal-Mart Stores Inc., which recorded a rare drop in business, as well as Abercrombie & Fitch Co. and Federated Department Stores Inc.

"Consumers are feeling pressured by higher gasoline prices and a sluggish housing market, particularly low and middle income consumers," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass.

Analysts had already expected last month to be weak after an early Easter motivated many consumers to do their holiday shopping in March, siphoning away part of April's business. But sales were much softer than expected, raising concerns that retailers will also see disappointing results in the months ahead.

The UBS-International Council of Shopping Centers sales tally posted a decline of 2.3 percent, the biggest drop since the index started tracking the data. The tally is based on same-store sales or sales at stores open at least a year, which are considered a key indicator of retailers' health. For the combined March and April months — which provides the best read on the spring selling season, the tally was up a modest 1.8 percent, below the 2.8 percent forecast.

Michael P. Niemira, chief economist at the ICSC, said it was the weakest spring performance since 2003, when the tally registered a 1.5 percent gain for the two-month period.

While analysts will be closely watching how May fares since the month will provide a better indication of consumer's health, concerns are rising that shoppers can no longer bear the weight of the economy's woes.

"The slowdown is at hand," said Niemira.

Even the job market, which has been a pillar of consumer spending, is showing some signs of strain as the government reported earlier this month that employers added the fewest positions last month in two and a half years. And while the market has hardly collapsed, it appears job seekers will have a more difficulty in landing a position. The latest data on unemployment claims, however, was soothing since it showed that the number of laid off workers filing claims fell for a fourth straight week.