US retailers including Barnes & Noble Inc, Federated Department Stores Inc and May Department Stores Co anticipate sluggish sales this weekend as consumers stay home to watch televised Iraq war coverage.
Sales at US stores will likely drop by as much as 1 percent in the week ending tomorrow from a year earlier, according to the Bank of Tokyo-Mitsubishi Ltd. That probably will cause same-store sales to decline for the month, compared with an earlier expectation they would be unchanged, the firm forecasts.
The war in Iraq comes as US consumer confidence has fallen to the lowest in more than a decade. No event has so galvanized the nation since the Sept. 11 terrorist attacks, when consumers also were concerned about the safety of public places.
Reduced spending then caused retailers including Federated, Gap Inc and Best Buy Co to cut sales or earnings forecasts.
If "people stay home and watch TV, they don't go to bookstores," said Steve Riggio, chief executive officer of Barnes & Noble, the world's largest bookseller.
Speaking on a conference call with investors on Thursday, Riggio also said that authors' appearances to promote books on television are squeezed out by news, also hurting sales.
"There's a CNN effect," said Kazuto Uchida, chief economist with Bank of Tokyo-Mitsubishi, which tracks store sales. "People will not go out shopping."
May Department Stores, parent of Lord & Taylor and Filene's, had reduced traffic at its stores on Thursday, spokeswoman Sharon Bateman said.
"There is an initial onslaught where people stay home," said Robert Schumacher of Van Kampen Investments Inc, which manages about US$65 billion. "In the past, that has affected department stores more than anyone."
Manufacturers, from household-goods maker Procter & Gamble Co to athletic-shoe maker Nike Inc, say they expect US spending may be interrupted, at least for a few days, by consumers' preoccupation with the war.
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