U.S. Retail Sales Fall in Worst Drop in Four Decades

J.C. Penney Co., Nordstrom Inc. and Gap Inc. all reported sales drops of 10 percent or more at stores open at least a year. The decreases were less than some analysts estimated after 50 percent-off discounts lured customers grappling with the U.S. recession. Wal-Mart Stores Inc. posted a 3.4 percent gain, beating its forecast.

Declines in consumer spending in October persisted into the first part of November before rebounding after the Thanksgiving Day holiday. Retailers may need to keep promoting half-off markdowns over the next three weeks to attract customers, even though such sales erode margins during a period when they make a third or more of their annual profit.