If there are any bright spots on the horizon for consumer spending, they will not be found in January's retail sales numbers.

Wal-Mart Stores, the world’s biggest retailer, said sales excluding gasoline at its stores open at least a year eked out just a 0.5 percent increase for the month. The gain fell well short of the company’s very modest forecast of growth of 2 percent. Including fuel, sales rose 0.9 percent in January.

The retailer cited unfavorable weather and lower-than-expected redemptions from gift cards. "Gift card redemptions were below expectations, and customers appear to be holding gift cards longer and using them more often for food and consumables rather than discretionary purchases," Wal-Mart said.  

Macy's announcement on Wednesday that same-store sales were down 7.1 percent for January set the tone for today's monthly sales reports from the nation's retail chains.

The parent of Macy's and Bloomingdale's stores and the country's largest department store operator also said that it was eliminating 2,550 jobs, or about 1.4 percent of its workforce, as it consolidates its divisional central office organizations.

January is always a low-volume month for sales, but high food and fuel prices, a weak housing market, and recession fears sweeping the country will have provided extra reasons for consumers to keep their wallets closed this year.  

Department stores and women's apparel for the most the part underperformed even their gloomy forecasts, though J.C. Penney reported a smaller-than-anticipated 1.9 percent decline thanks to a strong performance in its apparel categories.
 
Abercrombie & Fitch posted no change in same-store sales, while sales at American Eagle Outfitters slipped 7 percent. Limited Brands underperformed with an 8 percent decrease. Pacific Sunwear—which was expected to show a 1.2 percent rise in same-store sales—was off 7.4 percent for the month.
 
Gap, which was expected to decline 6.5 percent, saw stronger sales in the company's Banana Republic chain lead to a mere slip of 2 percent.
 
Saks' upmarket clientele do not seem to be curtailing their spending just yet, as the department store exceeded expectations with a 4.1 percent increase in same store sales; but Nordstrom's sales stumbled a full 6.6 percent as recession fears continue to climb into higher tax brackets.
 
As consumers look for ways to cut spending, discounters will continue to be the biggest winners. The overall category is expecting to have posted a 2.3 percent gain in January, according to Thomson Financial. Costco reported a 7 percent gain in same-store sales, surpassing the 6.6 percent estimate, while Target sales fell 1.1 percent
 
Poor January sales will serve as yet another reminder, alongside recent housing and job data, that the economy is slowing and perhaps sliding into a recession.

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