Once again, discount retailers such as Wal-Mart, Target and Kohl's outpaced less value-conscious competitors in November as layoffs, deep discounting and warm weather strained sales of non-essential items, deepening fears of a dismal holiday shopping season.

"The holiday season is not shaping up very well,'' said Michael Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., who cut his 4 percent holiday forecast in half to 2 percent after seeing the retailers results Thursday.

The Bank of Tokyo-Mitsubishi's same-store sales index of 79 retailers was up 2 percent, below the 3 percent forecast. The November results fell below the 4 percent gain recorded a year ago, and were the weakest since November 1990, when the index had a 1.3 percent gain, Niemira said.

Shoppers avoided splurging at department stores and specialty retailers like Saks and Gap, the No. 1 apparel chain, which suffered a 25 percent decline in sales. They snatched up Monsters Inc. and Harry Potter toys and basics for the home, such as food, housewares and fabric.

"We are looking at a consumer spending picture in which only discounters came through shining like a bright star and stores that sold things for the home," said Kurt Barnard, president of Barnard's Retail Trend Report.

November and December are crucial for retailers, accounting for as much as one-quarter of their annual sales.

The November results were in fact inflated by 1.5 percent, Niemira estimated, given that many retailers, largely department stores, benefited from a quirk in the retail calendar. Retailers including Federated Department Stores, May Department Stores Co., and Kohl's Corp., used a reporting period that included nine days of post-Thanksgiving sales, compared with two days a year ago.

Sales figures for those retailers in December will appear weaker than they really are because of the calendar shift.

U.S. consumer confidence dipped for a fifth straight month in November, and at its lowest level in more than seven years, was reflected by shoppers. The index is closely watched because it can give hints about future consumer spending, which accounts for about two-thirds of all U.S. economic activity.

Shoppers Bought More Food

Wal-Mart, the world's largest retailer, said sales at stores open at least a year — or same-store sales, a key measure of retail performance — rose 4.3 percent, at the low end of its projected 4 percent to 6 percent range.

The Bentonville, Arkansas-based company, which also operates warehouse store chain Sam's Club, said shoppers bought more items such as food, boosting sales to $19 billion from $16.9 billion last year.

However, despite an increase in customer traffic, the average amount purchased rose at a slower rate as food carries a low profit margin. The trend is expected to continue, Wal-Mart said.

Smaller rival Target, which also operates the Mervyn's and Marshall Field's department stores, posted an 11.4 percent gain for the four weeks ended Dec. 1, slightly below its plan.

Kohl's, which sells name-brand apparel and housewares at moderate prices, said same-store sales surged 25.9 percent. The increase was inflated by a calendar shift.

Warm Weather Ruin Sweater Sales

Department stores and specialty apparel retailers did little celebrating. Most of the companies resorted to heavy markdowns in an effort to stimulate traffic during the month.

Record temperatures that warmed up much of the United States made matters worse, as shoppers neglected big-ticket winter items for retailers such as sweaters and coats.

Gap, the battered owner of Gap, Old Navy and Banana Republic stores, said same-store sales significantly missed expectations and were sharply worse than a 1 percent dip a year earlier. It posted a 17 percent drop in October.

The San Francisco-based company also warned of a "considerably worse" fourth-quarter loss than the 6 cents loss reported in the third quarter, excluding a charge.

Once the leading icon of casual name-brand clothes, Gap has shown little progress in overcoming fashion missteps and floundering sales, which have led to declining profits and a spiraling stock price over the past two years.

Gap's total sales for the four-week period ended Dec. 1 fell to $1.2 billion from $1.4 billion last year.

Federated, parent of Macy's and Bloomingdale's, said same-store sales inched up 0.9 percent, as the Sept. 11 attacks stung sales at its large Manhattan locations and the dot-com bust hurt sales in California. It also said it still sees December same-store sales falling 11 percent to 14 percent.

Specialty apparel retailers Intimate Brands Inc., operator of the Victoria's Secret lingerie chain, and No. 2 specialty apparel chain Limited Inc. said same-store sales declined 6 percent and 7 percent, respectively. Both companies backed Wall Street estimates for their fourth-quarter earnings.

Women's apparel retailer AnnTaylor Stores Corp. posted a 0.8 percent rise in same-store sales, citing a more promotional environment than it had expected. Talbots Inc. posted a 12 percent drop, due to a difficult retail environment and tough comparisons to last November.

Abercrombie & Fitch Co., which sells clothes geared toward college students, said November same-store sales fell 5 percent, better than estimates of an 11 percent to 13 percent drop.

Rival youth-oriented retailer American Eagle Outfitters Inc., which declined to issue a holiday sales forecast last month because of uncertainty about the economy and the weather, said same-store sales fell 9.6 percent but said total sales were up.

Saks Averts Total Disaster

No. 4 U.S. retailer Sears, Roebuck and Co. said same-store sales slid 1.3 percent, slightly above its lowered projection, citing weakness in apparel and seasonal merchandise.

Saks, which has been hurt by a slowdown in consumer spending and fallout from Sept. 11 — especially at its Saks Fifth Avenue luxury chain — said same-stores sales rose 2.9 percent, in line with expectations. Saks' results were helped by the November-December calendar shift.

"If it hadn't been for the calendar shift. . .it would have been disaster for the department stores," Barnard said.

No. 2 discount retailer Kmart Corp., which has been losing ground to rival Wal-Mart, reported a 2.6 percent drop in sales for the month, falling below its plan.

Warehouse club operator Costco Wholesale Corp. posted a 4 percent rise, hurt by softer tobacco sales.

No. 1 consumer electronics chain Best Buy Co. reported third-quarter same-store sales rose 1.6 percent, helped by a calendar shift, and said third-quarter earnings for the will beat expectations, on "large gains" in video games and DVD movies.

Reuters and the Associated Press contributed to this report.