BEIJING, Sep. 2 (Xinhuanet) -- US retailers, including Wal-Mart Stores Inc and Kohl's Corp, may have posted their smallest sales gains in 17 months during August as higher gas prices and sluggish wage growth cut into back-to-school shopping budgets.

    Sales at stores open at least a year probably increased by as little as 1.5 per cent from the year-earlier period, according to the International Council of Shopping Centres, which tracks the results of 76 chains in a monthly survey. A gain of less than 2 per cent would be the smallest since March 2003. China Daily reported Thursday.

    A slowdown in spending by budget conscious consumers is being felt the most at discounters such as Wal-Mart, which accounts for about 40 per cent of the index. Gasoline prices were 16 per cent higher in August than a year earlier, while the average wage for about 80 per cent of non-farm workers fell in the past three months when adjusted for inflation.

    "When people reach into their pockets, they find there isn't as much as there was last year," said George Foley, who helps manage about US$14 billion at Philadelphia-based Glenmede Trust Co, including J.C. Penney Co shares.

    The August through September back-to-school season, when merchants get more than a sixth of sales, is the second-biggest selling period after Thanksgiving to Christmas. A slowdown in consumer spending, which accounts for about two-thirds of US economic activity, may signal a decline in growth.

    "When gasoline has gone up as much as it has on a weekly cash budget, discretionary items get pushed off," said Dollar General Corp Chief Executive David Perdue Jr.

    Gasoline prices, while down from the May high of US$2.06 for a gallon of regular grade, are still higher than last year's prices. A survey by the International Council of Shopping Centres found 35 per cent of people said high gasoline prices were affecting their spending.

    Wal-Mart, the world biggest retailer, cut its August forecast last week, saying sales will be little changed or rise as much as 2 per cent. The Bentonville, Arkansas-based company cited weak back-to-school sales and Hurricane Charley, which affected sales at 200 locations.

    Most retailers will release August results today. Sales may have declined as much as 8 per cent at Gap Inc and 10 per cent at Abercrombie & Fitch Co, according to Brian Tunick, an analyst at JPMorgan Chase & Co in New York. Tunick has a "neutral" rating on clothing chain Gap and an "overweight" recommendation on Abercrombie.

    Shares of Wal-Mart fell 53 US cents to US$52.67 on Monday in New York Stock Exchange composite trading. Gap, based in San Francisco, dropped 36 US cents to US$18.74, while New Albany, Ohio-based Abercrombie & Fitch slumped 87 US cents to US$28.

    Retailers faced tough comparisons with last year, when US$400 federal child tax rebate checks were sent out, helping boost August sales by 5.1 per cent. Over the past three years, August sales have risen by an average of 3.4 per cent.

    Last year, the August sales period included one day of the three-day Labour Day weekend. This year all of the weekend's sales will be included in September because of a shift in the retail calendar.

    Chains that feature the latest fashions sought by teenagers fared better. Sales are expected to rise as much as 20 per cent at American Eagle Outfitters Inc and 4 per cent at Pacific Sunwear of California Inc, Tunick said.

    "I don't go to Wal-Mart," said eighth-grader Jordan Parah while shopping at Four Seasons Mall in Greensboro, North Carolina. Specialty stores "have cuter things," she said.

    Parah spent US$42 of her US$115 in babysitting money on a pair of low-rise jeans from Pacific Sunwear of California Inc's store, US$15 on a skirt from Gadzooks Inc, and US$5 on a halter-top from American Eagle.

    Sales gains are also expected to be larger at retailers less dependent on budget conscious shoppers. Nordstrom Inc and Neiman Marcus Group Inc will likely report gains of about 6 per cent, said Linda Kristiansen, an analyst at UBS Securities in New York, in a report.

    "We've definitely spent more than we've ever spent," said Susan Louderback, shopping with her 20-year-old daughter, Katherine, at a Nordstrom store in the Plaza at King of Prussia in Pennsylvania. Louderback, of Wayne, Pennsylvania, expected her two daughters to spend about US$500, and now estimates they've spent as much as US$1,500 each.

    A greater percentage of back-to-school dollars is being spent on products such as laptop computers, cell phones and digital music players, said Stephen Baker, an analyst with market research firm NPD Group in Port Washington, New York.

    "Electronics are a lot higher up the food chain than they used to be," Baker said.

    NPD estimates that consumer electronic sales will rise as much as 10 per cent during the back-to-school period.

    The average pay of non-management workers was 8 US cents an hour less in July when adjusted for inflation compared with a year earlier. That followed a 12-cent dip in June and 5-cent decline in May, according to the US Bureau of Labor Statistics.

    The US Consumer Price Index rose 3 per cent in July compared with a year earlier. The Conference Board's index of consumer confidence fell to 98.2 in August, the first decline since February.

   (China Daily)