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Byline: Alexandra Steigrad
The Squeeze Goes On: Comp Sales Dive and So Does the Dow
The dog days of summer lived up to their name at retail last month, further heightening the fears of analysts and investors about the holiday season ahead.
And while Wall Street expected a poor performance by retail in August, the financial markets recoiled at the news, sending the Dow Jones Industrial Average and the Standard & Poor's Retail Index down more than 3 percent Thursday.
Despite falling oil prices and fresh fall merchandise, most retailers were scorched by their August results, with the majority reporting declines in comparable-store sales and none of the department stores tracked by WWD registering increases. In that sector, the high end got hammered like everyone else, with Neiman Marcus, Nordstrom and Saks Fifth Avenue all seeing comp-store sales declines.
Retailers saw sluggish sales that only began to pick up during the last 10 days of the month just in time for kids throughout much of the U.S. to head back to school. Beset by growing unemployment, rising food prices and difficult credit and housing markets, consumers, uncertain if recent declines in gas prices would stick, generally headed to discounters for economical one-stop shopping, while department stores and specialty chains struggled.
Expectations going into Thursday's same-store sales results were low, and weak comps did not alter that view. The combination of the poor start to the fall season and higher unemployment claims sent stocks into a tailspin as the Dow fell 344.65 points to 11,188.23, while the Standard & Poor's Retail Index fell to 401.44.
"August was another in a series of weak months as the back-to-school season fizzled and the start of the fall fashion season got off with a resounding thud," said Brean Murray, Carret & Co. …