America’s retailers endured another tough month in April, but they saw signs of hope that at least some consumers are coming out of hiding. Overall, retail sales for the month climbed 1.2% from a year earlier, according to Thomson Reuters. But Easter shopping, warm weather and Wal-Mart’s performance were responsible for much of that increase, rather than an across-the-board rebound in sales.

The Easter holiday fell in April this year, a boost for stores selling children’s clothes and for pharmacies and discounters that sell Easter candy. Wal-Mart Stores, the world’s largest retailer, reported that its sales at stores open at least year rose 5% in April compared with those in the same month a year ago.

Without Wal-Mart, retail sales fell 2.7% last month. Still, several clothing stores reported that their sales also grew last month or at least fell at a slower pace than before. Many of the results were better than analysts’ expectations, burnishing hopes that the consumer economy was no longer in a free fall.

“People are feeling a little bit more confident and optimistic,” said Linda Tsai, a specialty retail analyst at MKM Partners. April was still difficult for high-end stores like Saks, which reported a 32% drop in sales at stores open at least a year. Abercrombie and Fitch said its sales fell 22% in April compared with the same month last year a stark decline, but less than the 34% drop it reported in March.

The numbers offered retailers some encouragement after a brutal few months. After one of the worst holiday shopping seasons in decades, companies slashed their costs, reduced inventories, laid off employees and started conserving cash to survive a long freeze in consumer spending.

But the days of 20% sales declines seem to be over, at least for now. Sales at Gap Stores, which were off 23% in January, fell a mere 4% in April compared with the same month last year. Sales at American Eagle were off 5%, compared with a 22% decline in January. And double-digit declines at department stores like JC Penney, Kohl’s and Dillards narrowed.

Figures released last week in the SpendingPulse report from MasterCard Advisors showed declines in nearly every category of clothing retailers, but on a more moderate scale. Apparel sales fell 15% in April from a year earlier, compared with a 23% drop in March.

“They’re really the best numbers we’ve seen in anywhere from three to five months,” said Michael McNamara, vice president of SpendingPulse, which estimates sales using data and computer modeling.

Although consumer spending has shown some signs of stabilising, growing 2.2% in the first three months of 2009, shoppers do not seem likely to return to their spendthrift ways anytime soon. Unemployment is still rising, incomes are falling, and while consumers are not as frightened as they were a few months ago, they are still wary about the economy.

All that has been good for discounters like Wal-Mart, BJ’s Wholesale Club and Target, where sales rose 0.3% in April after nine straight months of declines.

Many stores are already offering 20% discounts and two-for-one deals on spring clothing, eager to compete for a smaller pool of customer dollars. Stores like Aeropostale, where sales rose 20% from last April, are capitalising on the new thriftiness, and others are stepping up efforts to emphasise their value and customer service, analysts said. “We believe that value is the new fashion chic,” said Jennifer Black, president of Jennifer Black and Associates, which tracks apparel retailers.

During the holiday season, stores were so desperate to unload their stocks of electronic gadgets and sweater sets that they began offering discounts of 80% and three-for-one sales. Consumers who paid $5 for a pair of jeans now expect markdowns and bargains when they go shopping, and shoppers are still scarce enough that stores will fight for their business, analysts said.

“That discounting in the fourth quarter changed consumers,” said Kimberly Greenberger, specialty retail analyst at Citigroup.

Stores that usually begin clearing spring and summer merchandise around Father’s Day in June may start marking down items in the third of fourth week of May this year, analysts said, anticipating that their competitors will also try to get a jump on summer sales.

NY Times / Jack Healy