A shopper takes her son along for the ride which shopping at the Heinen's grocery store in Bainbridge Twp., Ohio in this Dec. 13, 2007 file photo. Steadily rising food costs aren't just causing grocery shoppers to do a double-take at the checkout line _ they're also changing the very ways we feed our families. (AP Photo/Amy Sancetta, file)
NEW YORK (AP) -- Most retailers reported sluggish sales in March when consumers - fretting about mounting economic problems - limited their shopping to food and other essentials.
As the nation's merchants reported sales figures on Thursday, it was clear that shoppers remained focused on buying basics at discounters and wholesale clubs and snubbed mall-based chains for clothing and other discretionary purchases.
Wal-Mart Stores Inc. and Costco Wholesale Corp. were among the best performers. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise.
But March proved to be another weak month for many others, including Limited Brands Inc. and Pacific Sunwear of California Inc., both of which reported sharp drops in sales.
"Discounters are going to continue to do well in this economy," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Anything that is discretionary is going to continue to be under pressure."
Wal-Mart Stores reported a 0.7 percent gain in same-store sales, or sales at stores opened at least a year. That was slightly below the 1.0 percent estimate by analysts surveyed by Thomson Financial.
The nation's largest retailer said that food and consumables, and electronics such as video games and digital cameras sold well. But cold weather hurt apparel, except for basics like T-shirts. Home furnishings continued to be weak.
Wal-Mart raised its first-quarter earnings outlook because better inventory controls yielded fewer markdowns and reduced store theft.
Costco Wholesale posted a 7 percent gain in sales. Analysts had expected a 5.9 percent gain.
Limited Brands reported an 8 percent drop in sales, larger than the 7.2 percent decline that analysts had expected.
Among teen retailers, Pacific Sunwear's sales dropped 8 percent, much greater than the 1.7 percent decrease that Wall Street had expected.
Wet Seal Inc. posted a 10.8 percent decline in sales versus an expected 7.5 percent decline.
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