• by Sarah Mahoney , October 12, 2007

Remember last month, when retailers said August sales were lousier than expected because school was starting a little on the late side? Turns out they were wrong, and the back-to-school crowd never really materialized. Many of the nation's largest retailers turned in weak September sales results, and the International Council of Shopping Centers attributes the generally lousy results to too-warm weather and consumer fears about the economy.

TNS Retail Forward, which tracks an index of 50 retailers each month, reports that September same-store sales growth was just 1.3% from the prior month, and down from a 3.1% sales-weighted composite reported last month, and below the 4.3% composite reported in September of last year.

"Warm weather no doubt explains part of the chill in September sales, but shoppers are also clearly telling us they want to hold the line on spending," the Columbus, Ohio-based retailing consultant reports. "That was the case for back-to-school spending, and shoppers are also cutting their plans for Halloween and the holidays."

Retailers are definitely feeling pinched by more restrained teenagers. The Wet Seal, for example, says same-store sales--the measure watched most closely by retail experts--fell 7%. At Abercrombie & Fitch, sales dropped 4%, at Hot Topic, 2.9%, and at American Eagle Outfitters, 2%. Sales at Aeropostale rose slightly, gaining 1.3%.

While the dip in teen spending in September seems relatively minor, it actually is part of a much steeper decline. Piper Jaffray & Co. just released its latest survey of teen shopping habits, and says that total fashion spending fell 24% from the spring 2007 survey, "due to a gradual maturing of the fashion cycle."

"The fashion category still represents 42% of the total teen budget, despite moderation in spending habits," say Piper Jaffray analysts. "However, we found that spending expectations remain largely unchanged, as nearly 50% of the students plan to spend the same amount of money on apparel this season. We believe the discrepancy between budget dollars and expectations may be due to a decline in contributions from parents."

Sales also declined at department stores, with JCPenney reporting a dip of 4.6%, Macy's a decline of 2.7%, and Kohl's, 3.2%. Problems at the Gap also continued, with sales falling 7%.

Stores at the higher and lower end of the economic scale, however, had more upbeat news. Saks says its same-store sales gained 7.7%, Neiman Marcus, up 6%, and Nordstrom, up 3.2%. Discounters also did better: Wal-Mart's sales gained 1.4%, The TJX Cos., which include T.J. Maxx, rose 2%, and Target says its sales were up 1.2%. Sales at BJ's Wholesale Club grew 3.9%, and Family Dollar reported a 0.5% increase.