Retailers Have Worst January In Almost Four Decades

03/28/2008 02:45 am ET | Updated May 25, 2011

Here is a sign of how shaky the economy is becoming: Wal-Mart says its shoppers are redeeming their holiday gift cards for basic items -- pasta sauce, diapers, laundry detergent -- rather than iPods and DVDs.

Merchants had hoped that shoppers with gift cards would provide a lift after a slack holiday season, partly because they tend to spend more than the value of the card. But that did not seem to happen last month, and retailers are feeling the pain.

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