GROCERY STORE SALES GROWTH DIPS IN MARCH

JENNIFER OWENS

WASHINGTON (FNS) -- Retail sales at grocery stores advanced 0.2% in March from February, which represented a slight decrease in the growth rate.

In comparison, February grocery sales had advanced 0.4% from January, the Commerce Department reported.

Year-to-year comparisons also showed a slower growth rate in March. Grocery store sales for that month in 1998 were up 0.1% from March 1997. February 1998 sales advanced 0.7% from February 1997.

Meanwhile, March retail sales in the larger category of food stores rose 0.2% against the previous month and 0.3% against a year ago.

Overall retail sales in March slipped 0.1% against February -- including a 0.7% drop at automotive dealers -- but held to a 3.1% gain against a year ago.

General merchandisers -- including variety, discount and department stores -- reported a slim increase in March against the previous month, up 0.2%, but were up 6.1% compared with a year ago.

Department store sales dipped slightly in March against February, off 0.2%, but nevertheless showed a 6.7% improvement over a year ago.

At the Conference Board in New York, economist Ken Goldstein called the department store dip "an aberration" that would most likely reverse itself in April. "We get dips now and again," he said. "But far more important is the [growth] trend that's now firmly entrenched. If retail sales are going to weaken, we're several months away from that."

Rosalind Wells, chief economist for the National Retail Federation in Washington, agreed, pointing to strong labor markets, solid wage growth, low inflation and high consumer confidence as factors that should keep consumers spending throughout the year.

Wells noted that GAF sales -- combining general merchandise, apparel and furniture and home-furnishing stores -- grew by 6.4% the first quarter compared to the same period last year. Wells said she expects this pace to continue for the rest of 1998.

"Sales at these stores have been very robust since the beginning of the year," Wells said. "And March sales were stronger than expected in light of the late Easter holiday this year. We expect some of the Easter business to show up in healthy April sales."

Goldstein said many economists had expected weaker March sales due to a strong February, helped by a warm winter and a late Easter in mid-April. The healthy March sales results, he said, pose two possibilities: "That March took a little bit from April, or that for all our talk about how strong the consumer market is, it's even stronger than that."

Wells said that to gauge the real strength of Easter holiday sales, "we will have to look at March and April results combined."

But for Goldstein, the answer to spring's generally healthy sales results is no mystery. "These [consumers] are folks that are confident," he said. "And they have money to spend."