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NEW YORK (AP) – The August start of the back-to-school shopping season was a disappointment for major retailers, delivering the industry a third straight month of tepid sales and its weakest gain in almost a year and a half. Higher gasoline prices and consumers’ ongoing worries about jobs contributed to the poor showing.

Even Wal-Mart Stores Inc., the industry leader, suffered last month, turning in its weakest performance in 31/2 years. The discounter pared its third-quarter sales and profit forecast Thursday after the company and other retailers released their results.

The discouraging news came from nearly all retail sectors and raised concerns that consumers who have helped prop up the economy with spending might now be contributing to its slowing.

The big exceptions were high-end stores whose customers were the first to benefit from the economic recovery and who haven’t been as vulnerable to rising gas prices. And Best Buy Co. Inc. offered a solid sales outlook based on strong business from its digital TVs and such services as its 24-hour computer support task force.

Still, overall sales fell far short of expectations.

“The back-to-school season is not off on a strong footing, and while September may be more telling, you really have to ask how sustainable consumer spending power is,” said John Morris, senior retail analyst at Harris Nesbitt.

Retailers found low-to-middle-income shoppers more frugal in response to higher gas prices and grocery bills. Americans are also worried about their jobs. On Tuesday, the Conference Board reported a larger-than-expected decline in consumer confidence, and attributed the slide to concerns about job prospects.

Stores also blamed Hurricane Charley, which swept through Florida last month, forcing stores to close. And sales were affected by technical factors, a late Labor Day weekend, which will come a week later than a year ago and will push sales into the September reporting period, and the fact that year-earlier results were boosted by the government’s one-time child care tax credits.

The International Council of Shopping Centers-UBS sales tally of 71 retailers was up a meager 1.1 percent, missing its already reduced forecast for a 1.5 percent to 2 percent gain. That’s the weakest performance since March 2003, when merchants reported a 0.2 percent decline.

The tally is based on what the industry calls same-store sales, or sales at store opened at least a year. They are considered the best indicator of a retailer’s performance.

August’s sales figure is below the 3 percent gain seen in June and July, and well off the average 6 percent increase of January through May.


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