Consumer spending slowed to a crawl in January, with retail sales at major chains rising just 0.5% in what was by one measure the month's worst performance in nearly 40 years, according to reports released Thursday.
Evidence of consumer caution came from both ends of the marketplace.
Discounter Wal-Mart Stores Inc. said shoppers held on tight to the gift cards they received over the holidays or used them to buy milk and bread rather than toys or iPods. High-end Saks Inc. said customers shifted more of their spending to "promotional events" -- making purchases when items were specially priced.
Wal-Mart's sales were higher this January than last, though just barely, while Saks saw a 4.1% increase. Sales at Macy's Inc. stores fell so much more than expected -- by 7.1% -- that the company slashed its quarterly profit forecast and also said that as part of a restructuring plan it would eliminate 2,300 jobs. Costco Wholesale Corp., on the other hand, recorded a 7% hike.