Providing further evidence of a slowing U.S. economy and a more cautious consumer, Wal-Mart Stores and other retailers reported one of the weakest months of retail sales in years.
"Everyone's being hurt right now," said Dana Telsey, chief research officer at Telsey Advisory Group, in an interview on CNBC's "Squawk Box."
"We really haven't had a time in quite some time where we've had every sector from luxury goods to hard-lines to soft-lines to department stores all being weak at the same time," Telsey said.
"The slowdown of the consumer is occurring, and I think we're going to see this continue, probably into February and March. March comparisons are very tough."
Retailers had hoped consumers would cash in the gift cards they received during the holidays, but shoppers put off that spending and didn't nibble on the steep discounts being offered in many stores.
Wal-Mart said gift-card redemptions fell short of their expectations. The world's largest retailer also noted that when consumers used their gift cards, many purchased necessities like food, instead of splurging on higher margin discretionary items.
Wal-Mart reported a 0.5 percent increase in its same-store sales results, falling short of the 2 percent increase predicted by analysts. Meanwhile, rival Target, the second largest U.S. retailer, said its sales dropped 1.1 percent, steeper than the 0.4 percent decline that had been projected.
Driven by 'Value and Need'
"Consumers continue to be selective in their purchases, driven by value and need," said Larry Montgomery, chairman and chief executive of Kohl's .
The discount retailer posted a 8.3 percent decline in January same-store sales, a much wider loss than analysts had projected. Analysts were estimating sales would decline 6.3 percent.
In another sign that consumers are trading down, both Costco Wholesale and BJ's Wholesale Club fared well in January, with sales topping expectations.
Costco said same-store sales rose 7 percentlast month, while BJ's logged a 7.8 percent increase.
The Thomson Financial Same Store Sales Index was projected to increase 1 percent, but it only inched up 0.3 percent. Excluding Wal-Mart, Thomson's index rose 0.2 percent. Year-earlier growth was 3.9 percent and 5.2 percent, respectively.
Macy's Sets the Tone
Macy's set the tone late Wednesday when it posted a wider-than-projected 7.1 percent decline in same-store sales. The slow sales prompted Macy's to cut its fiscal fourth-quarter earnings estimates and announce plans to cut 2,300 jobs.
The cutback in consumer spending was notable because it crossed through many parts of the retail space. High-end retailers, which had been previously immune to slowing consumer spending, saw mixed results with JW Nordstromfalling short of estimates, while Saks outpaced analysts estimates.
Nordstrom said same-store sales fell 6.6 percent, compared with the 0.7 percent decline forecast by analysts.
Meanwhile at Saks, same-store sales rose 4.1 percent from last year, topping the average analyst estimate of 2.2 percent gain.
In general, sales at department stores have been weak. Although J.C. Penney managed to top analyst estimates, sales still declined in January. The retailer said sales fell 1.9 percent, compared with the 6.3 percent drop estimated by analysts.
The Plano, Texas, retailer said it benefited from consumer response to its seasonal clearance sale as well as a positive response to its spring merchandise.
Specialty women's chains such as Talbots and AnnTaylor Storesalso have been hurting from a combination of competition and purse tightening by women, who tend to be the first to spend less during times of economic uncertainty.
"The teen consumer is looser with his/her money, while baby boomer women are continuing to narrow their purchasing patterns," said retail analyst Jennifer Black of Jennifer Black and Associates.
After another month of poor sales, Talbots said it would post a loss in the fourth quarter of between 23 cents and 28 cents a share, excluding items. The retailer also announced plans to close another 22 stores as it scales back its expansion plans.
These steps are in addition to previous store closures announced by Talbots, which is in the midst of a strategic review of its business.
AnnTaylor fared better. The New York retailer reported flat same-store sales in January, which was better than the 4 percent decline projected by analysts polled by Thomson Financial. By division, same-store sales for Ann Taylor fell 6.5 percent in January, and same-store sales for Ann Taylor Loft rose 5.9 percent.
The Gapalso bucked the trend, and reported stronger than expected same store sales.
The apparel retailer said January same-store sales fell 2 percent, but that was better than decline of 6.5 percent that analysts were expecting.
The better-than expected results also were strong enough to allow Gap to raise its earnings estimate for the fourth quarter to a range of 33 cents to 35 cents a share.
This forecast, which includes a benefit of about 1 cent a share from favorable tax rate adjustments, compares with an average analyst estimate of 29 cents a share, Thomson said.
But Limited, American Eagle Outfittersand Dillard's weren't as fortunate, as sales fell short of estimates.
--Reuters contributed to this report.